THE CARIBBEAN^ 
 VENEZUELAN DEVELOPMENT 
 
 edited hy 
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The 
 
 CARIBBEAN: 
 
 VENEZUELAN DEVELOPMENT 
 A CASE HISTORY 
 
 SERIES ONE VOLUME XIII 
 
 A publication of the 
 SCHOOL OF IN T ER-AMERI C AN STUDIES 
 
 which contains the papers delivered at the thirteenth conference on the Carib- 
 bean held at the University of Florida, December 6, 7, and 8, 1962 
 
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The 
 
 CARIBBEAN: 
 
 VENEZUELAN DEVELOPMENT 
 A CASE HISTORY 
 
 edited by A. Curtis Wilgus 
 
 1963 
 UTilVERSirr OF FLORIDA PRESS 
 
 Gainesville 
 
A University of Florida Press Book 
 
 Copyright 1963 by the Board of 
 Commissioners of State Institutions 
 OF Florida 
 All Rights Reserved 
 
 Library of Congress 
 Catalogue Card No. 51-12532 
 
 Printed by The E. O. Painter Printing Company 
 DeLand, Florida 
 
Contributors 
 
 Nettie Lee Benson, Librarian, Latin American Collection, Uni- 
 versity of Texas, Austin 
 Armando Branger, President, Federation of Chambers of Com- 
 merce and Industry, Caracas, Venezuela 
 Francisco De Venanzi, Rector, Central University of Venezuela, 
 
 Caracas 
 John F. Gallagher, Vice President, Foreign Administration, Sears, 
 
 Roebuck & Company, Chicago 
 Victor Gimenez Landinez, Minister of Agriculture, Caracas 
 Armando R. Gonzalez, President, Farm Workers' League, Caracas 
 Harry A. Jarvis, President, Creole Petroleum Corporation, Caracas 
 Harry W. Jones, Director of Latin American Affairs, Westinghouse 
 
 Electric International Company, New York 
 Benito Raul Losada, General Director, Ministry of Finance, 
 
 Caracas 
 Eduardo Mendoza G., Vice President, Protinal C. A., Caracas 
 EuGENio Mendoza, Materiales Mendoza, Caracas 
 Lorenzo Monroy, General Director, Ministry of Education, Caracas 
 Teodoro Moscoso, Director, Alliance for Progress, Department of 
 
 State, Washington, D. C. 
 Peter R. Nehemkis, Jr., Counsel, Whirlpool Corporation, Wash- 
 ington, D. C. 
 Alejandro Oropeza Castillo, Governor of the Federal District, 
 
 Caracas 
 J. Wayne Reitz, President, University of Florida 
 Irving Rouse, Chairman, Department of Anthropology, Yale Uni- 
 versity, New Haven, Connecticut 
 
 Enrique Tejera Paris, President, Industrial Bank, Caracas 
 
 Arturo Uslar Pietri, Member, Venezuelan Senate for the Federal 
 
 District, Caracas 
 Santiago Vera Izquierdo, Dean, Engineering Faculty, Andres 
 
 Bello Catholic University, Caracas 
 
vi The Caribbean : Venezuelan Development 
 
 Gaston Vivas Berthier, President, Cotton-Growers' Chamber, 
 
 Caracas 
 Gustavo J. Vollmer, President, Santa Teresa Industries, Caracas 
 A. Curtis Wilgus^ Professor of History and Director, School of 
 Inter-American Studies, University of Florida 
 Guillermo Zuloaga, Member, Board of Directors, Creole Petro- 
 leum Corporation, Caracas 
 
Foreword 
 
 W^E, AT THE UNIVERSITY of Florida, believe that the 
 Thirteenth Annual Caribbean Conference held in December, 1962, 
 is not only unique in many ways but will be remembered as a 
 series of meetings in which almost one hundred Venezuelans par- 
 ticipated in discussions on a most important topic, namely, "Vene- 
 zuelan Development, A Case History." Fifteen Venezuelan experts 
 in government, business, and education presented papers in their 
 individual fields of interest which lent an authentic tone to all 
 of the meetings. 
 
 At no previous conference have we had the privilege of intimate 
 discussion with so many leading authorities on the topics presented 
 in the program. We also enjoyed the privilege of having seven 
 representatives from the United States prepare and deliver con- 
 ference papers. Moreover, simultaneous translation was provided 
 in Spanish and English, and audience participation was enthusiastic 
 and most important. It is not surprising, therefore, that this con- 
 ference was more widely attended, both as to delegates and geo- 
 graphical spread, than previous ones. 
 
 The undoubted success of this conference was made possible by 
 the complete and enthusiastic cooperation of the Creole Petroleum 
 Corporation with headquarters in Caracas. We deeply appreciate 
 the splendid and intelligent cooperation of this company. 
 
 As with past conferences, the papers contained in this volume of 
 proceedings are published in an attractive format by the University 
 of Florida Press, which enjoys a wide reputation for the excellence 
 of its book designing and typography. 
 
 J. Wayne Reitz, President 
 University of Florida 
 
 Vll 
 
The Carihhean Conference Series 
 
 Volume I (1951): The Caribbean at Mid-Century 
 
 Volume II (1952): The Caribbean: Peoples, Problems, and 
 
 Prospects 
 
 Volume III (1953): The Caribbean: Contemporary Trends 
 
 Volume IV (1954) : The Caribbean: Its Economy 
 
 Volume V (1955) : The Caribbean: Its Culture 
 
 Volume VI (1956): The Caribbean: Its Political Problems 
 
 Volume VII (1957): The Caribbean: Contemporary International 
 
 Relations 
 
 Volume VIII (1958): The Caribbean: British, Dutch, French, 
 
 United States 
 
 Volume IX (1959): The Caribbean: Natural Resources 
 
 Volume X (1960): The Caribbean: Contemporary Education 
 
 Volume XI (1961): The Caribbean: The Central American Area 
 
 Volume XII (1962): The Caribbean: Contemporary Colombia 
 
 Volume XIII (1963): The Caribbean: Venezuelan Development, 
 
 A Case History 
 
Contents 
 
 Map of Caribbean Area Frontispiece 
 
 List of Contributors v 
 
 Foreword— J. Wayne Reitz vii 
 
 Introduction: esteban gil borges^ statesman of the Americas 
 
 ( 1 879- 1942)-A. Curtis WiLGus xi 
 
 Part I-BA CKGR O UNDS 
 
 1. Guillermo Zuloaga: a geographical glimpse of Vene- 
 
 zuela 3 
 
 2. Irving Rouse: archaeology of Venezuela . . . . 14 
 «# 3. Arturo Uslar Pietri: the city of gold and the city of 
 
 justice 23 
 
 Part H-EDUCATION 
 
 4. Lorenzo Monroy: Venezuelan educational policy . . 35 
 
 5. Francisco De Venanzi: the role of the autonomous 
 
 state university 50 
 
 6. Santiago Vera Izquierdo: the role of private education 
 
 IN VENEZUELA 67 
 
 Part III-PUBLIC SECTOR OF THE ECONOMY 
 
 7. Alejandro Oropeza Castillo: the government and the 
 
 economy 79 
 
 8. Benito Raul Losada: Venezuelan tax and fiscal policies 90 
 
 9. Enrique Tejera Paris: the needs and the future of in- 
 
 dustrial AID 101 
 
 10. Eugenio Mendoza: the housing problem . . . .111 
 
 11. Teodoro Moscoso: Venezuela and the alliance for 
 
 progress 116 
 
 Part IV-PRIVATE SECTOR OF THE ECONOMY 
 
 12. Peter R. Nehemkis, Jr.: wanted: a business alliance for 
 
 PROGRESS 133 
 
 ix 
 
X The Caribbean : Venezuelan Development 
 
 13. Armando Branger: Venezuelan business and the busi- 
 
 nessmen 147 
 
 14. Gustavo J. Vollmer: the role of the private Venezuel- 
 
 an INVESTOR 157 
 
 15. John F. Gallagher: the role of private foreign in- 
 
 vestment .... 163 
 
 16. Harry A. Jarvis: the role of private enterprise in de- 
 
 veloping countries 169 
 
 e> 17. Harry W. Jones: the development of la guayana^ "the 
 
 future RUHR OF SOUTH AMERICA" 178 
 
 Part V-AGRARIAN REFORM 
 
 18. Eduardo Mendoza G.; agriculture: the key to devel- 
 
 opment 195 
 
 19. Victor Manuel Gimenez Landinez: objectives and re- 
 
 quirements OF AN integral AGRARIAN REFORM . . 212 
 i 20. Armando Gonzalez: agrarian reform, as seen by the 
 
 LABOR MOVEMENT IN AGRICULTURE 224 
 
 21. Gaston Vivas Berthier: agrarian reform and alliance 
 
 FOR progress 236 
 
 Part VI-BIOGRAPHICAL SOURCES 
 
 22. Nettie Lee Benson: Venezuela: a case history of de- 
 
 velopment—bibliography AND reference SOURCES 247 
 Index 297 
 
Introduction 
 
 ESTEBAN GIL BORGES, STATESMAN OF THE AMERICAS 
 
 (1879-1942) 
 
 At the pan AMERICAN UNION in Washington, D. C, on 
 August 24, 1943, the American republics paid tribute to a distin- 
 guished Venezuelan statesman and a leading authority on inter- 
 American relations, who for twelve years (1924-36) had served as 
 Assistant Director of the Pan American Union. The tribute con- 
 sisted of unveiling a portrait, draped with a Venezuelan flag, of 
 this great son of Venezuela. Before an audience that filled the 
 room. Dr. Gil Borges' successor. Assistant Director of the Pan Ameri- 
 can Union Dr. Pedro de Alba, began the ceremony by recalling in 
 his inimitable fashion the brilliant public career of Dr. Gil Borges. 
 The Director-General of the Pan American Union, Dr. Leo S. 
 Rowe, then expressed sentiments of affection and esteem for his 
 good friend and colleague. His Excellency, Dr. Diogenes Escalante, 
 Ambassador of Venezuela to the United States, removed the Vene- 
 zuelan flag from the portrait and expressed his personal and his 
 country's feelings concerning Dr. Gil Borges. The ceremony ended 
 when the Director-General and the Assistant Director of the Pan 
 American Union placed a wreath of flowers before the portrait. 
 A few days after the ceremony the Minister of Foreign Affairs of 
 Venezuela, Dr. C. Para Perez, sent a cablegram to Dr. Rowe ex- 
 pressing his personal feelings and the feelings of the Venezuelan 
 
 XI 
 
xii The Caribbean : Venezuelan Development 
 
 government and people for the commemoration sentiments which 
 so well expressed opinions of inter-Americanists everywhere. 
 
 This ceremony at the Pan American Union was only one of 
 many following the death of Dr. Gil Borges. On October 7, 1942, 
 at a special session of the Governing Board of the Pan American 
 Union, one of the actions was the adoption of a resolution of con- 
 dolence which the Director-General was asked to transmit to the 
 government of Venezuela and to the family of Dr. Gil Borges. 
 Many notices of the death of the great Venezuelan are found in 
 popular periodicals and scholarly journals throughout the Americas. 
 His innumerable friends remembered his outstanding contributions 
 in the field of inter-American relations, for he had devoted much 
 of his life to improving mutual respect among the American 
 peoples and governments. Dr. Gil Borges' reputation was world- 
 wide and everywhere he was recognized as one of the leading 
 statesmen of the Americas. The present writer enjoyed the pleas- 
 ure, privilege, and honor of working with Dr. E. Gil Borges on a 
 number of occasions in Washington, and he is happy to have the 
 opportunity to acknowledge his personal regard for this great 
 Venezuelan statesman. 
 
 It seems especially fitting here in this volume on the history of 
 Venezuelan development to associate Dr. Gil Borges' name with 
 leading Venezuelan diplomats, statesmen, businessmen, and others 
 (many of them his friends) who present collectively their individual 
 opinions concerning the multitudinous national and international 
 problems of an emerging Latin American country. The survey 
 herewith of the life and activities of Dr. Gil Borges clearly proves 
 that he is worthy to be ranked among the contemporary leaders of 
 national and international reputation in present-day Venezuela. 
 
 Dr. E. Gil Borges was born in Caracas on February 8, 1879. After 
 graduating from the Colegio Villegas in Caracas he entered the 
 National University of Venezuela in 1892. Here he studied po- 
 litical and social sciences and in 1898 obtained his doctorate, with 
 special interest in international public and private law and inter- 
 American affairs. Although Dr. Gil Borges was to devote his en- 
 tire life to public service he greatly enjoyed his home life. He 
 married Matilda Martinez Paz Castillo and three children were 
 born to them. 
 
EDITOR S INTRODUCTION Xlll 
 
 In 1900, at the age of 21, he was appointed counselor on ques- 
 tions of international law to the Venezuela-Colombian Mixed Fron- 
 tier Commission, After two years with this body he was appointed 
 Commissioner of the Supreme Court of the Federal District and in 
 1903 he became President of this Court. But Dr. Gil Borges' educa- 
 tion prepared him for more important positions. In 1909 he be- 
 came first secretary and in 1911 Councilor of the Venezuelan Em- 
 bassy in Washington. In 1914 he became Councilor of the 
 Venezuelan Embassy in Paris and the next year he was put in 
 charge of his government's diplomatic negotiations in Spain. In 
 1916 he became Juridical Councilor of the Ministry of Foreign 
 Relations of Venezuela, and three years later, in 1919, he was ap- 
 pointed Minister of Foreign Relations. In 1921, when the statue of 
 Simon Bolivar was dedicated in New York City, Dr. Gil Borges was 
 appointed Special Ambassador to this inauguration. 
 
 In 1924 Dr. E. Gil Borges was honored by the American republics 
 by being elected Assistant Director of the Pan American Union in 
 Washington. He served for twelve years until 1936, when at that 
 time he again became Minister of Foreign Relations of Venezuela, 
 in which position he remained until his death in 1942. 
 
 This brief recital of a number of important positions held by 
 Dr. Gil Borges does not do adequate justice to his wide influence. 
 During two periods of his life. Dr. Gil Borges served as Professor 
 at the University of Caracas. From 1903 to 1909 he taught a 
 variety of subjects at the National University including history, 
 sociology, political economy, and the philosophy of law. In 1918 he 
 became Professor of International Law and Diplomacy at the 
 National University. At this institution he was a popular lecturer, 
 and his wide knowledge of international affairs and especially inter- 
 American relations enabled him to win many students in support 
 of improved inter-American cooperation. Dr. Gil Borges was also 
 a cultural missionary and a great proponent of the American way 
 of life. He never missed an opportunity to promote the cultural 
 and economic interests of his native country. 
 
 Dr. Gil Borges was a forceful public speaker, and he never 
 spoke more brilliantly than when he was before a popular audi- 
 ence. An example of his delight at public appearances is evident 
 from reports in the New York Times of April and May, 1921, on 
 the occasion of the presentation of the statue of Simon Bolivar 
 to the city of New York. As special envoy of Venezuela to the 
 United States, and as Minister of Foreign Affairs, he was given 
 
xiv The Caribbean : Venezuelan Development 
 
 a typical New York welcome. The statue was in Central Park and 
 Grover Whalen organized a parade up Fifth Avenue. Dr. Gil 
 Borges was the first to speak and the New York Times reported 
 that he "presented the statue with a flow of oratory that awakened 
 Monsieur Viviani, master of French oratory, and considered the 
 finest orator in the world." The mayor of New York City, John 
 F. Hylan, accepted the gift for the city and praised Bolivar with 
 only slightly less brilliance than did Gil Borges, using fewer words, 
 however. President Harding was almost late for the ceremony but 
 he finally arrived to make an address, pleading for a spiritual union 
 between North and South America and reaffirming that the United 
 States was ready to fight for the Monroe Doctrine. President 
 Harding and his important pronouncements, especially regarding 
 the forthcoming naval disarmament conference in Washington, at- 
 tracted world-wide attention to this ceremony. 
 
 From New York City Dr. Gil Borges travelled for two weeks 
 in various parts of the United States. In Chicago he expressed the 
 desire that trade might develop between Venezuela and the Mis- 
 sissippi Valley. He referred especially to industrial manufacturing 
 in the Middle West and the use of raw materials from Venezuela. 
 He added simply: "We need what America has, and you want 
 what we have." 
 
 Because of the remarks made at the dedication of the Bolivar 
 statue. General Juan Vicente Gomez, President of Venezuela, de- 
 cided to ask for the resignation of Dr. Gil Borges from the position 
 of Minister of Foreign Affairs. Observers immediately jumped to 
 the conclusion that General Gomez was unhappy because Dr. Gil 
 Borges had praised Bolivar too much and President Gomez too 
 little! 
 
 Fortunately for Gil Borges, and for the cause of Pan-American- 
 ism in general, he now decided to leave Venezuela and take up 
 residence in Washington, D. C. This he did in October, 1921, 
 hoping to join the law firm organized by Breckinridge Long, who 
 had served as Third Assistant Secretary of State under President 
 Woodrow Wilson. It was while Dr. Gil Borges was in Washington 
 that he was elected Assistant Director of the Pan American Union 
 to fill the vacancy caused by the death of Dr. Francisco J. Yanes, 
 another Venezuelan. 
 
 Dr. Gil Borges' contribution to inter-American peace and good 
 will in this strategic position was made through many speeches and 
 addresses, but especially through special studies and reports which 
 
EDITOR S INTRODUCTION XV 
 
 he prepared as Assistant Director. His interests ranged over all 
 topics of an inter-American nature. In 1927, for example, he was 
 instrumental in organizing with a number of scholars in Washing- 
 ton discussions which culminated in the creation in 1930 of the 
 Inter-American Bibliographical and Library Association. In this 
 connection he helped to organize the program for a conference on 
 bibliography to be held in Havana in February, 1930. Because this 
 conference did not convene. Dr. Gil Borges decided to appoint an 
 advisory committee on bibliography for the Pan American Union, 
 on which the writer was pleased to serve. As long as Dr. Gil Borges 
 remained in Washington, he was interested in bibliographical and 
 library activities. 
 
 After the death of President Gomez in December, 1935, the 
 Minister of War, General Eleazar Lopez Contreras, became Pro- 
 visional President and eventually President. Reforms were needed 
 everywhere and the new executive appointed Dr. Gil Borges Min- 
 ister of Foreign Affairs in February, 1936. Dr. Gil Borges served 
 until his death in 1942. One of his contributions to the govern- 
 ment of Venezuela at this time was that he brought about a re- 
 organization of the Department of Foreign Affairs and abolished 
 bureaucratic bickering. He believed that Venezuela could now 
 put into effect some of the ideas of Bolivar's dream of 1826 at the 
 Congress of Panama. He now became one of the outspoken ex- 
 ponents of inter-American friendship and cooperation. This ob- 
 jective he considered first and foremost in Venezuela's foreign 
 relations, and in 1939 he informed the League of Nations that his 
 country was withdrawing from that organization. 
 
 Fortunately for the Inter-American System, Dr. Gil Borges was 
 Minister of Foreign Affairs of Venezuela during the meeting of 
 several important inter-American conferences. On September 23, 
 1939, the Pan American Conference on Neutrality met in Panama, 
 and on October 2 the delegates signed the "Declaration of Panama," 
 which presented a united front to the belligerents and which created 
 a "safety zone" about the continents, exclusive of Canada. Dr. 
 Gil Borges played an important part in these discussions and his 
 ideas were always considered with respect. This conference also 
 created an Inter-American Financial and Economic Advisory Com- 
 mittee of twenty-one financial experts, one from each country, to sit 
 in Washington beginning November 15, 1939, and to continue for 
 the duration of the war. The conference further provided for the 
 meeting of an Inter-American Neutrality Committee of seven mem- 
 
xvi The Caribbean : Venezuelan Development 
 
 bers to study and make recommendations concerning neutral prob- 
 lems for the duration of the war. 
 
 From July 21 to 30, 1940, another Conference of Foreign Min- 
 isters was held, this time in Havana, Cuba. At this meeting, the 
 United States delegation was headed by Secretary of State Cordell 
 Hull, while Dr. Gil Borges attended as Minister of Foreign Affairs 
 of his own country. At the meetings a plan presented by Dr. Gil 
 Borges was adopted by the delegates as "Resolution XV," which 
 made provision for close collaboration among the American re- 
 publics, collectively or in groups, if aggression was threatened 
 against any one of them. 
 
 // 
 
 Throughout his entire career. Dr. Gil Borges led a quietly active 
 life. His friends were frequently amazed at the depth and breadth 
 of his thinking as expressed in speeches, conversation, and writings. 
 During his busy life he maintained membership in scholarly acad- 
 emies, societies, and associations throughout the hemisphere, and 
 in a few of these organizations he played an active part. Dr. Gil 
 Borges' many talents were widely recognized and he received a 
 doctorate honoris causa from Georgetown University. Many 
 decorations were presented to him, including the Order of the 
 Liberator of Venezuela, the Order of Isabel la Catolica of Spain, 
 the Order of the Sun of Peru, the Order of Merit of Chile, the 
 Order of Merit of Ecuador, the Vasco Nuiiez Medal of Panama, the 
 Manuel de Cespedes Medal of Cuba, and the Medal of the House 
 of Orange of Holland. 
 
 The publications of Dr. Gil Borges are too numerous to list 
 here. These, however, range through all phases of national and 
 international law, especially the codification and unification of 
 national and international law, the evolution of international law, 
 the various arbitral problems between American states, and the 
 philosophy and history of law. 
 
 An appreciation of Dr. Gil Borges' contributions in the inter- 
 American field was aptly summed up by Sumner Welles, one-time 
 Under-Secretary of State for Latin American Affairs. In a cable 
 dated August 4, 1942, sent to the Minister of Foreign Affairs of 
 Venezuela, Mr. Welles said: "During the years Dr. Gil Borges was 
 in Washington, he endeared himself to all those who had the good 
 fortune to be associated with him. His untiring devotion to the 
 
EDITOR S INTRODUCTION XVll 
 
 strengthening of the friendship between Venezuela and the United 
 States and to the great cause of inter-American relations, and his 
 brilliant practical demonstrations of that devotion during his two 
 periods as Foreign Minister of your great country have earned him 
 a lasting place in the grateful memory of the people of the United 
 States." 
 
 In March, 1936, when Gil Borges gave up his position as As- 
 sistant Director of the Pan American Union to become Minister 
 of Foreign Affairs of Venezuela, Cordell Hull, Secretary of State 
 of the United States, paid tribute to him in a message to the 
 Governing Board of the Pan American Union: "During the twelve 
 years that he has occupied this important post, he has proved him- 
 self a devoted servant to the cause of Pan-Americanism, In the 
 fulfillment of his duties, he has given evidence of ability of the 
 highest order. His fine personal qualities have endeared him to 
 every member of the Board. On this occasion I wish to express to 
 Dr. Gil Borges, in your name as well as in my own, the deep sense 
 of appreciation of the Board for the important service that he has 
 rendered and to combine therewith our warmest wishes for the 
 fullest measure of success in the fulfillment of the important duties 
 which the President of Venezuela has entrusted to him." 
 
 Dr. Leo S. Rowe, Director-General of the Pan American Union, 
 had this to say: "I feel under a special debt of gratitude to him 
 for his constant and loyal cooperation. During the twelve years 
 that we have worked together, his broad statesmanlike outlook 
 has been of the greatest value in the fulfillment of the functions 
 entrusted to the Union. Venezuela may well congratulate herself in 
 securing for the high post to which he has been called the services 
 of a man of broad vision and high ideals." 
 
 Dr. Gil Borges was much moved by the tributes paid to him 
 at this meeting, and he expressed his warm appreciation for the 
 fine cooperation that members of the Governing Board had given 
 to him and to Dr. Rowe, and thanked them individually and col- 
 lectively. Dr. Gil Borges said, among other things, "By means of 
 the unremitting effort of the Governing Board, the Pan American 
 Union has come to be a symbol of the spirit of the Americas, a 
 tangible expression of a civilization mounting to a historical height 
 whence may be discerned a future of peace, justice, liberty, and of 
 social and political perfection for the nations of this hemisphere. 
 There is no one but must admire the builders of this work of 
 peace and concord and look confidently to the future of the under- 
 
xviii The Caribbean : Venezuelan Development 
 
 taking in whose service so many minds work harmoniously together 
 to broaden and strengthen this great organization of the Pan 
 American Union, already one of the most effective forces in pro- 
 moting the peace and happiness of America and the world." 
 
 /// 
 
 In the brief space allowed here it is not possible to do justice 
 adequately to the views and opinions of Dr. Gil Borges on the 
 great variety of topics and subjects in which he was interested and 
 which he discussed both orally and in writing, characterized by an 
 exceptional command of English language and style. However, a 
 few quotations taken from Chapter V in a volume entitled Mod- 
 ern Hispanic America, edited by myself and published by the 
 George Washington University Press in 1933, will suffice. The 
 chapter is historical and is entitled "The European Policy of 
 Equilibrium and the American Policy of Continental Solidarity." 
 It is divided into four sections, the first entitled "The Spiritual 
 Heritage of America." In speaking of the ideological factors in 
 Hispanic American international policy. Dr. Gil Borges wrote: 
 
 Though the contribution of Hispanic America to civilization 
 in the fields of art, science, philosophy, and literature has been 
 great, its greatest services have been rendered in the political and 
 international fields. The noblest part of the mission of Hispanic 
 America has been the effort, continued without interruption 
 throughout a century by her statesmen, philosophers, and people, 
 to build in the New World a society of nations which might live 
 in accordance with the ideals of democracy, international peace, 
 and fraternity. These are the firmest, the strongest, the most 
 permanent threads in the fabric of Hispanic American civilization, 
 and thought and action have moved steadily onward along these 
 lines. They are threads which reach deep into the past and far 
 into the future of the race; they stand out unbroken and luminous 
 against the background of the history of the people. 
 
 Of all the elements of civilization which Spain brought to the 
 New World, none had greater historical significance, none had a 
 more profound influence on the formation of the national and 
 international conscience of America than these two ideals; of de- 
 mocracy as the basis of the political society, and of human soli- 
 darity and fraternity as the foundation of the international society 
 (pp. 338-39). 
 
 In the second section of Dr. Gil Borges' paper entitled "The 
 
EDITOR S INTRODUCTION XIX 
 
 European System" he emphasizes the importance of the concept of 
 the balance of power. 
 
 At the end of the fifteenth century certain events took place 
 which had a far-reaching influence on international relations. They 
 were the discovery of the New World and the opening of new 
 routes to the Orient. The civilization that had started in Asia and 
 then transplanted and developed in the basin of the Mediterranean 
 entered with the discovery of America on a period of trans-oceanic 
 civilization. 
 
 This period brings into international relations the principle of 
 colonial expansion. In time this principle became the source of 
 conflicts, and the formula of international action between Spain 
 and Portugal in America is born out of the effort to reconcile the 
 differences between them in the matter of colonial expansion. 
 
 While the power of the national states was growing, international 
 relations gave rise to new uses of that system of balance of power 
 which had its origin in the Greek cities and which was later used 
 by the Italian cities of the thirteenth century. The system assumed 
 two forms in Europe: of mutual guaranties, and of alliances of the 
 weaker to resist the stronger. The first form inspired the treaties 
 of Westphalia, Utrecht, and Vienna; the second the war against 
 Charles V, the war against the House of Austria, and the wars 
 against Louis XIV and Napoleon. 
 
 The system of balance of power has been a method devised to 
 establish or to re-establish equilibrium. Alliances to counteract 
 the growing strength of a single power have been one of the most 
 frequent forms in which the balance of power idea is found. The 
 League of Cambrai was formed to destroy the prosperity of Venice; 
 the alliance of England and France was formed against the growing 
 power of Holland; and at the beginning of the eighteenth century, 
 the alliance of the northern states of Europe was for the purpose 
 of weakening the power of Sweden. The application of this system 
 has unavoidably resulted in territorial partitions and in rectification 
 of boundaries (pp. 354-55). 
 
 Section three of Dr. Gil Borges' paper is headed "The American 
 System," with a subtitle, "Solidarity and International Coopera- 
 tion." Dr. Gil Borges first discusses the American background and 
 in so doing says about his own country: 
 
 Venezuela declared her independence on the 5th of July, 1811, 
 and signed, in the same year, a treaty with the Department of 
 Cundinamarca, part of the Viceroyalty of Santa Fe. In this, the 
 first international treaty of Spanish America, a plan is outlined 
 
XX The Caribbean : Venezuelan Development 
 
 for the "Union of all the Nations that may be Established in 
 America." An analogous treaty was signed by Venezuela and Chile 
 in 1811. In these treaties we can see the deeply rooted conscious- 
 ness of American solidarity planning the basis of continental 
 unity before the birth of the republics; it was this very faith in 
 the unity of Latin America which was to shape reality out of 
 Utopia, and which gave cohesion to the movement of emancipa- 
 tion. From north to south, the independence of the continent was 
 achieved through the formula of cooperative military and political 
 action. 
 
 One of the most memorable documents of this epoch is the ac- 
 count of the campaign of 1813 given by Bolivar to the Congress of 
 Colombia assembled in the city of Cartagena. He spoke in part 
 as follows: "The lessons given by the experience of others should 
 not be lost to us. The spectacle presented by Europe, steeped in 
 blood in an endeavor to establish a balance which is forever 
 changing, should correct our policy to save us from such sangui- 
 nary dangers." Instead of that "continental balance of power which 
 Europe is seeking where it is less likely to be found, that is, in 
 war," he advocates a "union of all South America under a national 
 body so that a single government may unite the great resources of 
 the continent for a single purpose . . . while an intensification 
 of mutual cooperation in the interior will lift us to the summit of 
 power and prosperity" (pp. 363-64). 
 
 Dr. Gil Borges' next discussion concerns "Hispanic American 
 Policy." He defines this as follows: 
 
 The broad lines of Hispanic American policy include the fol- 
 lowing points: (a) a system of conferences to consider questions of 
 common interest to all the nations of America; (b) the organiza- 
 tion of a league of nations upon the basis of the unity of moral, 
 political, economic, and spiritual interests; and (c) the organiza- 
 tion of continental peace through the medium of the codification 
 of public and private international law, uniformity in civil law, 
 mediation, conciliation, arbitration, abolition of war, and the re- 
 nunciation of the right of conquest (p. 370). 
 
 The third division of this section is entitled "Juridical Organi- 
 zation," and he says: 
 
 The nations of Latin America were conscious from the be- 
 ginning that one of the strongest ties that preserve international 
 unity is that of identical institutions. Her statesmen had a clear 
 vision of an America united by uniform institutions of law in 
 civil, commercial, and maritime matters. They undertook this 
 
EDITOR S INTRODUCTION XXI 
 
 work with technical ability, and gave models of uniform legislation 
 to the world. 
 
 The fourth subheading is entitled "The Territorial Basis of the 
 Hispanic American States." He begins this by saying: 
 
 At the birth of their existence as independent states, the colonies 
 of Spain had to determine the boundaries of their territories. The 
 new republics inherited the Spanish empire, but that empire had 
 been a great political entity, whose sole frontiers were adminis- 
 trative divisions, the lines of which were almost always indefinite 
 and uncertain. As a consequence, the determination of frontiers 
 has been for more than a century a problem that has injected 
 much danger and perplexity into the international life of the 
 American states (p. 383). 
 
 During the wars for independence from the mother countries 
 the emerging governments agreed on the Uti Possidetis of 1810 
 whereby each state was to retain the boundaries which it had had 
 in colonial days. On this Dr. Gil Borges writes: 
 
 The two phases of the doctrine of uti-possidetis were in this 
 manner definitely fixed: one, the exterior aspect, was founded upon 
 the treaties concluded by Spain, and which were now considered 
 the basis for the demarcation of frontiers with foreign powers 
 possessing colonies in America; the other, the interior aspect, was 
 founded on the royal decrees which had established the adminis- 
 trative division known as the viceroyalties and captaincies general, 
 and which were now considered the basis for the demarcation of 
 the national frontiers between the American states. 
 
 The doctrine of uti-possidetis de jure was not a mere political 
 expedient or convenient method for the distribution of territories 
 and the demarcation of frontiers. It has, in reality, transcendental 
 historical and juridical significance. Together with the Monroe 
 Doctrine, this formula has been a barrier to the colonization of 
 South American territory by foreign powers. The doctrine of uti- 
 possidetis de jure and the Monroe Doctrine have the same end in 
 view, but are differentiated by their origin and form. The Monroe 
 Doctrine was a unilateral national formula; that of uti-possidetis de 
 jure was an international juridical formula. The doctrine of Mon- 
 roe was a negative formula closing America to foreign colonization; 
 the doctrine of uti-possidetis was a positive, assertive, inclusive 
 formula. It included all the territory legitimately possessed by 
 Spain by virtue of the fact of discovery and the titles and treaties 
 which became the patrimony of the American states. 
 
 Another consequence of the doctrine of uti-possidetis was that 
 
xxii The Caribbean : Venezuelan Development 
 
 it recognized a common title of sovereignty over the territory to 
 all the American states that had taken form out of the colonial 
 empire of Spain. This fact, of a common title to the territory, 
 made any act of any European or American states which affected 
 the validity of the title a matter of common concern to all the 
 American states. Each state was vitally interested, not only in 
 maintaining the integrity of its own territory, but in maintaining 
 the integrity of the territory and sovereignty of all the American 
 states, for the origin of its right was identical with that of the 
 other states. Thus it was that, with the doctrine of uti-possidetis, 
 there arose as a corollary the doctrine of the collective guaranty of 
 the territory of the American states. The reciprocal guaranty of 
 territorial integrity was a direct consequence of the doctrine of 
 uti-possidetis, and the two were consequences of the common tra- 
 dition and the common origin of the American nations. 
 
 The territorial policy of the American states did not crystallize 
 out of the speculations of philosophers or out of the theories of 
 statesmen. It was born out of historical realities and its origin lies 
 deep in the secular traditions of America. The international policy 
 of Hispanic America has continuity and permanence principally be- 
 cause it has been an interpretation of the realities of American life. 
 The international policies of Hispanic America, territorial as well 
 as political, economic as well as cultural, express the fundamental 
 geographic, historical, economic, and spiritual unity of America. 
 This explains why every movement in Latin America is a develop- 
 ment of that ideal of unity which we have seen is so deeply im- 
 bedded in the past, which has been so faithfully kept through 
 more than a century of history, and which is the goal of the future 
 (pp. 390-92). 
 
 The fifth and last section is devoted to "The Organization of 
 Peace in Hispanic America," Here Dr. Gil Borges discusses the 
 codification of international law, the renunciation of war as a 
 method for the settlement of international controversies, the sys- 
 tem of guaranties, the principle of nonintervention, methods for 
 the prevention and the pacific settlement of international contro- 
 versies, and sanctions to enforce international obligations. Dr. Gil 
 Borges provides a tabulated summary of treaties and agreements 
 among the American states to enable them peacefully to solve their 
 mutual difficulties. As a historical writer. Dr. Gil Borges surveys 
 the panorama of the international relations of the American re- 
 publics; in his time no man had a better grasp and understanding 
 of this intricate subject. 
 
EDITOR S INTRODUCTION XXIU 
 
 IV 
 
 The influence and impact of Dr. Gil Borges on the interpretation 
 and formulation of international law in relation to the American 
 republics cannot )'et ht completely judged. The complicated 
 problems of the international relations of the nations today tend 
 to obscure many of the individual points of view and ideology 
 maintained by statesmen of the American republics prior to World 
 War II. Perhaps no other Latin American, and certainly no 
 Venezuelan, gave more thought to the innumerable inter-Ameri- 
 can problems or expressed more profound opinions with beneficial 
 results than did Dr. Gil Borges. Throughout his whole life. Dr. 
 Gil Borges was respected and admired, and his views and opinions 
 were sought, not only by his own countr^'men but also by those 
 throughout the Western Hemisphere and in other parts of the 
 world. His influence in the Pan American Union as Assistant 
 Director cannot be underestimated. His constant attempts to pro- 
 mote inter- American unity and peace must be considered and 
 weighed by every person who proposes to write and to study inter- 
 relations of the states of the Western Hemisphere, whether political, 
 economic, social, or cultural. Undoubtedly in the not too distant 
 future, graduate students in universities throughout the hemisphere 
 will attempt, and it is hoped will succeed, in evaluating the position 
 of Dr. Gil Borges in the complicated but important field of inter- 
 American relations. 
 
 A. Curtis Wilgus, Director 
 School of Inter- American Studies 
 
 Islote. Information for this chapter has come from a variety of sources, in- 
 cluding my own memories of pleasant personal association with Dr. Gil Borges. 
 Several references of value should be recorded here: The Diccionario Bio- 
 grdfico de Venezuela CI 953); Revista de la Sociedad Bolivariana ("Caracas, October 
 28, 1942); Georgetown University Academic Exercises on the occasion of the con- 
 ferring of the Degree of Doctor of Laws on Esteban Gil Borges (April 26, 1921); 
 Diego Carbonell, Sobre la personalidad de los Academicos Don Laureano Valle- 
 nilla Lanz y Don Esteban Gil Borges (Caracas, 1943); Pan American Union Bul- 
 letin, vol. 69, p. 271 (September, 1935), vol. 70, pp. 241-45 (March, 1936), vol. 76, 
 p. 705 (December, 1942), and vol. 77, pp. 618-21 (November, 1943); Modern 
 Hispanic America, edited by A. Curtis Wilgus, pp. 338-401 (Washington, 1933); 
 and a term paper written in 1950 by B. J. Tennery in my history course at 
 George Washington University. 
 
Parti 
 
 BACKGROUNDS 
 
The four major geographical zones and the principal petroliferous basins of 
 Venezuela. 
 
Guillermo Zuloaga : a geographical glimpse of 
 
 VENEZUELA 
 
 V ENEZUELA was the first country in the mainland of the New 
 World discovered by Columbus. He did so in his third voyage, 
 and filled with wonderment by the natural beauty of the country, 
 he concluded that he must have arrived at the Earthly Paradise. 
 He reported this extraordinary event to the Catholic King and 
 Queen of Spain in a remarkable letter as follows: 
 
 I always read that the world, land and water, was round, but in 
 addition to this I will say that it is more like a woman's breast and 
 that on the highest point, or nipple, which is the nearest to heaven, 
 is the promised land. And now that Your Highnesses have com- 
 manded that it be navigated, searched for and discovered, this 
 fact is made most evident, for in crossing the boundary that passes 
 west of the Azores one hundred leagues from north to south . . . 
 the ships begin to rise gradually toward the sky and then one en- 
 joys a more benign weather . . . for in this Blessed Land I found 
 the mildest climate and the land and trees very green and as 
 beautiful as in April in the gardens of Valencia . . . and the people 
 there are of a very lovely stature . . . and many wear pieces of gold 
 around their necks and some have pearls tied around their arms. 
 These are great proofs that this is the Earthly Paradise. 
 
 The news of the discovery of the Promised Land by the Admiral 
 awoke a lively interest among other navigators, and in the wake 
 of his caravels they came, first to harvest the rich pearls of Mar- 
 garita and Cubagua, and later to look for the gold of the Golden 
 City "El Dorado." The first of these conquerors that followed 
 
4 The Caribbean : Venezuelan Development 
 
 Columbus, Alonso de Ojeda, entered Lake Maracaibo and there 
 the native villages on stilts appeared to him like a little Venice, a 
 "Venezuela." Ojeda thus baptized the recently discovered land 
 with the name it now bears. 
 
 /. General Characteristics 
 
 Venezuela has an area of about 312,000 square miles, about the 
 size of Texas and Oklahoma combined. It is the most northerly 
 country of South America, and hence the one closest to Europe 
 and the United States. It borders the Caribbean Sea for about 
 1,750 miles and the Atlantic Ocean for about 440 miles. From La 
 Guaira to the Pacific Ocean, by way of the Panama Canal, the dis- 
 tance is 1,000 miles. To the nearest commercial port in Europe 
 the distance is about 4,000 miles. From north to south the country 
 measures about 800 miles, and from east to west about 950 miles. 
 
 Venezuela has a population today of just over 8 million, of which 
 slightly more than a million live in the capital city of Caracas and 
 its suburbs. Politically, the Republic of Venezuela is divided into 
 twenty states, two federal territories, and the federal district. 
 
 In reference to weather conditions, we have two seasons: the dry 
 (verano), which normally begins late in October and lasts until 
 late April or early May, and the rainy {invierno), which takes 
 the rest of the year. Our climate, however, because of the relatively 
 cool and dry trade winds, which blow steadily from the northeast 
 most of the year, is milder than our position in the Tropical Zone 
 would determine. Furthermore, we are fortunate in being south 
 of the Caribbean hurricane belt. 
 
 Important mountain ranges in the northern and southeastern 
 parts of the country subdivide the country into several distinct 
 geographical zones, each with its own characteristic climate, land 
 use, and economy. 
 
 Towards the north we have the Andean and Coastal Ranges, sep- 
 arated by the wide expanse of the Llanos, or Plains, from the 
 Guayanan Highlands south of the Orinoco. These northern ranges 
 stem out of the Main Andean Cordillera in Colombia and enter 
 Venezuela by first branching out into an enormous V, the Sierra de 
 Perija going north, and the Andes proper going northeast, leaving 
 the Maracaibo Basin in the middle. Further east the Andes become 
 the Coastal Range, which makes up the southern boundary of the 
 Caribbean Sea. 
 
BACKGROUNDS O 
 
 The Andes and the Coastal Range are the regions of Venezuela 
 with the most attractive climate, and their flanks and intermontane 
 valleys have the most fertile soils. As a natural consequence, al- 
 though they cover only 12 per cent of the land surface of Venezuela, 
 65 per cent of the population lives there. Sugar cane, corn, sesame, 
 rice, cotton, and other crops are grown in these valleys, terraces, 
 and flanks, while the higher wooded zones are the principal pro- 
 ducers of coffee. 
 
 The Andes proper, or Sierra Nevada de Merida, is a gigantic 
 mass of mountains that are relatively young, geologically speaking, 
 since their present elevation dates from the Tertiary Age. Its 
 height culminates in the Peak of Bolivar, over 16,000 feet high. 
 Its width, notably uniform, is about 65 miles. The narrow valleys 
 and steep flanks of the Sierra are intensively cultivated and the 
 high zones are the only parts of the country where wheat is grown. 
 
 Excellent mountain roads scale the Andes until they cross them 
 at an altitude of 13,000 feet, passing through picturesque colonial 
 towns and spectacular landscapes. In contrast to the steep Andean 
 valleys with their characteristic U-shaped profiles, which were dug 
 out by the glaciers of the Ice Age, we find here and there flat mesas, 
 geological witnesses of the rapid elevation of these mountains. It is 
 in these Andean mesas that some of Venezuela's more important 
 towns are found: Merida, Trujillo, La Grita, Valera; while San 
 Cristobal, the most important city of the area, lies in a wide and 
 fertile valley. 
 
 The Coastal Range, with the slight break of the Lara depression, 
 is a continuation of the Andes. It is a mountainous strip, about 320 
 miles long from east to west and some 45 miles wide from north 
 to south. From the valleys of the Turbio and the Yaracuy rivers 
 in the west, it extends to the Paria Peninsula and the Island of 
 Trinidad in the east, with the sole interruption of the Barcelona 
 Gap. It is divided by important valleys which run from east to 
 west, in two parallel units: the Coastal Range proper, which is a 
 narrow, high, and extensive chain of mountains rising abruptly 
 from the waters of the Caribbean, and another mountainous zone, 
 the Interior Ridge, wider but with less altitude, parallel to the 
 former. The latter loses height from north to south and gradually 
 disappears into the plains. 
 
 The Coastal Range, constituted partly by igneous and meta- 
 morphic rocks, culminates in high peaks, of which the best 
 known are Naiguata and La Silla (The Saddle), with an altitude 
 
6 The Caribbean : Venezuelan Development 
 
 of over 9,000 feet, both visible from Caracas. The Interior Ridge 
 rarely reaches altitudes of more than 5,000 feet. 
 
 In the series of valleys which separate these two mountainous 
 zones are found some of the most important cities of Venezuela- 
 Caracas, Maracay, Valencia— and some of the richest agricultural 
 land in the country, including the valleys of Aragua and Tuy. 
 Lake Valencia is located in one of these intermontane valleys. 
 
 Toward the east of Caracas, the Coastal Range disappears in the 
 Barcelona Gap and reappears in the states of Sucre and Monagas. 
 There, the Coastal Range proper forms the two prominent penin- 
 sulas of Paria and Araya. Because of a recent subsidence of these 
 mountains, geologically speaking, the central valley has submerged 
 below the waters of the sea, giving origin to the Cariaco Gulf, 
 while the secondary valleys, upon sinking, have formed the mag- 
 nificent bays of Puerto La Cruz, Guanta, Mochima, and others. 
 
 The Interior Ridge is made up principally of sedimentary rocks. 
 Cretaceous and Tertiary, shales, sandstones, and limestones of 
 marine origin. The limestones, both from the Eocene and from 
 the Cretaceous, contain spectacular outcrops like the Morros of 
 San Juan in the state of Guarico and the famous Guacharo Cave 
 in the state of Monagas. 
 
 The arid and mountainous zone of the states of Falcon and Lara 
 forms a salient toward the north of the Andes in the states of 
 Trujillo and Lara. This is the only desert in Venezuela, with 
 characteristic desert vegetation of thorny cacti and prickly pears. 
 The chief economic activities of the Falcon-Lara hill area are the 
 raising of goats and the cultivation of sisal and other fiber plants. 
 
 Beyond the mountains to the north is the Coastal Zone. This is 
 the smallest of the geographical zones of Venezuela, being mainly 
 a narrow strip between the mountains and the sea. In the west, 
 however, it broadens out to include the Lake Maracaibo Basin, 
 where the main oil fields of Venezuela are found. 
 
 The major ports of the country are found, logically, in this 
 zone: La Guaira, Maracaibo, Amuay, Punta Cardon, Punta Fijo, 
 Puerto Cabello, Puerto La Cruz, Guanta, Cumana, Cariipano, and 
 others. Although occupying only 7 per cent of the area of Vene- 
 zuela, this zone contains over 18 per cent of its population. 
 
 In the warm valleys near the sea, cocoa, sugar cane, coconuts, 
 and bananas are grown on a large scale. Important in the economy 
 of this area also is the fishing that occurs off the coast. 
 
 The islands in the Caribbean Sea along the coast, and the 
 
BACKGROUNDS / 
 
 Paraguana Peninsula, may be included in the Coastal Zone, al- 
 though their physiography does not necessarily conform to it. 
 
 //. The Llanos 
 
 These wide expanses, between the mountains in the north and 
 the Orinoco, are remarkably fiat grasslands, mostly open, but with 
 occasional large patches of forest and long "gallery" woods along 
 certain streams. The rivers, while very large, are sluggish because 
 of the slight gradient. For example, the lower reaches of the 
 Orinoco fall only about 250 feet in 750 miles. Because of this, 
 the river floods readily. 
 
 The Llanos have a climate characterized by great contrast be- 
 tween the wet and the dry seasons, the winter and summer of the 
 area. In the wet season, normally from April to October, tor- 
 rential rains fall, the rivers overflow, and great stretches of land 
 are flooded. Livestock seeks refuge in high places, and travel by 
 land is difficult, except over the modern arterial highways. 
 
 In the verano, from October to April, the air becomes dry, the 
 wind blows continuously, the rain stops, and the rivers, except 
 the largest, dry up. The livestock emigrates with the water sources, 
 the grass dies, and even the jungle trees lose their foliage. The 
 Plains are the Venezuelan region which stirs the imagination of 
 sportsmen and hunters. Rivers and lagoons are filled with exotic 
 fish: electric eels, which with their discharge can paralyze a bull 
 or a horse; caribes, small but ferocious fish, with jaws that possess 
 the force of pincers, which live in large schools and can eat an 
 animal in a few seconds, leaving only the skeleton and boiling, 
 blood-tinted water to mark the act; payaras, fish gifted with terrible 
 fangs; and catfish, of all forms and colors, some of which reach 
 five feet in length and weigh hundreds of pounds. Curious animals 
 such as the anteater, the chigilire, a giant rodent, wild boars, and 
 many others, are characteristic of the Plains. 
 
 The landscape, beautified by palm trees, is alive with birds. 
 Among the most colorful of these are the very inquisitive chen- 
 chena, with reptilian characteristics; the corocoro, or scarlet ibis, 
 with the color of fire; the herons, from the small egret formerly 
 coveted for its plumage and today happily protected by game laws, 
 to the great soldier heron; ducks of all kinds, from the native 
 Royal duck to the small migratory ones which fly yearly into the 
 Plains from the northern latitudes. 
 
8 The Caribbean : Venezuelan Development 
 
 The economy of the Llanos, formerly the traditional cattle 
 country of Venezuela, is now in a period of transition. Modern 
 technology is opening up to agriculture large zones in which, with 
 great success, rice, corn, sesame, and other crops are being pro- 
 duced. Cattle raising, likewise, is advancing by the introduction 
 of improved methods, new strains of stock, and more effective 
 means for controlling insect pests. The jeep has taken the place 
 of the horse and has greatly reduced the distances that formerly 
 made life difficult on the plains. 
 
 In order to accumulate water for the long dry season and also 
 to reduce the size of the flooded areas in the rainy season, large 
 dams and irrigation projects are being carried out. The Guarico 
 Dam, for example, near Calabozo, is ten miles long and permits 
 the irrigation of some 300,000 acres during the dry season. 
 
 The eastern Llanos have terrace-like mesas with sandy soils and 
 smooth tops with very scanty vegetation. These mesas, which may 
 be as high as 1,000 feet above sea level, are crossed by streams 
 which run through relatively deep canyons. Further east, the 
 Llanos end abruptly against the wide expanses of the Orinoco 
 Delta. 
 
 This Delta area, low and swampy, is crossed by the many distribu- 
 taries of the Orinoco. It is, as William Beebe called it, the "Land 
 of the Single Tree," being monotonously covered with thick man- 
 groves. 
 
 ///. The Guayana 
 
 The major geographic division of Venezuela is the Guayana, a 
 vast area that occupies 45 per cent of the land surface of the coun- 
 try, with scarcely 2 per cent of its population. All the region south 
 and east of the Orinoco River and the Casiquiare and the River 
 Negro zones in the Amazon River drainage are included in this 
 zone. 
 
 The legends of El Dorado, of Manoa, of Sir Walter Raleigh's 
 headless men, all have been associated with this region, and some 
 of them have almost been found to be true. Gold and diamonds 
 are discovered frequently, bringing with them fleeting prosperity. 
 These are in part responsible for some of the more colorful legends 
 that have arisen about the Guayana. But more fabulous even 
 than these legends, perhaps, is the wealth of iron ore that has been 
 discovered in the region in modern times. The great deposits of 
 
BACKGROUNDS ^ 
 
 high-grade iron found relatively close to the Caroni River are 
 among the largest in the world, totaling many million tons, and 
 are of very high quality. 
 
 On crossing the Orinoco from the Plains, one arrives in a land 
 that is geologically distinct: in place of the soft alluvium, one begins 
 to see curious granitic outcrops of round profile, an indication that 
 instead of the sedimentary rocks usually associated with deposits 
 of petroleum, one is now in a zone of igneous rocks which are at 
 times associated with metal-bearing formations. The granite is 
 overlaid in certain places by the sandstone of the "Imataca" for- 
 mation, typical of the iron-bearing rocks mentioned. In some 
 sites, such as El Pao and Cerro Bolivar, this is almost pure iron 
 oxide. Farther south, passing lowlands and jungles crisscrossed by 
 rivers of inky-black water and spectacular falls, one arrives at the 
 region of the Yuruari River, rich in gold deposits, and, finally, at 
 the Gran Sabana. 
 
 The landscape of the Gran Sabana is superb. Spectacular moun- 
 tain masses rise up with their flat tops and vertical sides, their 
 silhouettes reminding the viewer of the ruins of medieval castles. 
 These are the tepuis of the Indians, the "lost world" of Conan 
 Doyle. The Roraima, the Auyantepui, the Yacapana, the Duida, 
 with their smooth and vertical sides, are impossible to scale 
 without the use of ladders. A region of rare beauty, the Gran 
 Sabana is an unforgettable sight. From these high masses, whose 
 tops pierce the clouds, descend the highest waterfalls in the world: 
 Angel Falls, with an unobstructed drop of more than 3,000 feet, is 
 the best known, but there are many others of equal beauty and 
 breath-taking appearance. 
 
 Farther still to the south, toward Brazil, lies the Amazon terri- 
 tory. Here are gigantic jungles crossed by rivers of paradoxical 
 behavior; rivers that, running in opposite directions, join with 
 each other, just as the Casiquiare joins two of the largest rivers in 
 the world, the Amazon and the Orinoco. In these uninhabited 
 jungles, rubber and the tonka bean (sarrapia) grow wild and are 
 harvested in times of high prices. 
 
 In the Guayana, however, the most beautiful part of Venezuela 
 and nearly half of its territory, agriculture is practically nonexistent. 
 Other than the little subsistence farms (conucos) of the Indians and 
 a few cattle-raising ranches, there is no arable land. This vast 
 area is infertile, with the peculiar condition of having water in 
 abundance and all year. The acidity of the soils and that of the 
 
1 The Caribbean : Venezuelan Development 
 
 black waters of its beautiful rivers seems to be the cause of the 
 infertility. Were a way found to turn these infertile soils into good 
 farming land, this Guayana area would be the one where the great 
 increase of population should be absorbed. Because of this in- 
 fertility of its soils, the only important cities of the Guayana area 
 are Cuidad Bolivar and Puerto Ordaz-San Felix (these two cities, 
 separated by the Caroni River, will now be joined by a bridge and 
 renamed Santo Tome de Guayana) on the Orinoco River. Outside 
 of these main urban centers, there are a few near the gold and 
 iron mines. The rest of these 150,000 square miles is inhabited 
 only by a few nomadic miners who make their living out of 
 panning gold or diamonds and a few thousand Indians who still 
 live as they did in pre-Columbian days. On the other hand, from 
 an industrial point of view, the Venezuelan Guayana is in the proc- 
 ess of becoming a most important region, not only of Venezuela, 
 but of the Western Hemisphere. Its vast mineral wealth, its huge 
 hydroelectric potential, the proximity to the oil fields and gas 
 fields of eastern Venezuela, and the navigability of the Orinoco to 
 ocean-going ships, bring together a set of favorable circumstances 
 almost unequalled. The government's Corporacion de Guayana has 
 ambitious projects which, added to the steel mill and the hydro- 
 electric plant already built, will create this "Pittsburgh" of Vene- 
 zuela. 
 
 There are two geographic assets that Venezuela has that, to com- 
 plete this geographic glimpse, deserve individual treatment: the 
 Orinoco River and Lake Maracaibo. 
 
 IV. The Orinoco 
 
 Returning to Columbus and to his discovery of the Promised 
 Land, we see that he made his discovery in the Gulf of Paria, at 
 the mouth of Venezuela's greatest river. 
 
 When I arrived at a great mouth, two leagues wide, which sepa- 
 rates the Island of Trinidad from the Land of Grace, I found that 
 the water came out with as great fury as the Guadalquivir at flood- 
 time. I sent boats to take soundings, and by chance water was 
 taken from the sea and I found it sweet and as I proceeded I found 
 the water of the sea more sweet and tasty . . . and having discovered 
 this I sent a caravel forward and thus it went much farther until 
 it reached a very large gulf from which a very great river came out. 
 
 Columbus arrived at the Gulf of Paria during the month of 
 
BACKGROUNDS 1 1 
 
 August, 1498, and found the great river at its highest level, although 
 he saw only one of the many mouths of the great delta. The fact 
 that the water of the sea was sweet there caused ancient cartog- 
 raphers to call the Gulf of Paria the "Sweet Sea" on their maps. 
 
 The Orinoco with its innumerable tributaries has a drainage 
 area of several hundred thousand square miles. From the north 
 and the west it receives the great Llanos tributaries born in the 
 Andes: the Apure, the Arauca, the Meta, rivers of troubled waters 
 and unconfined beds which, in the rainy season, flood great regions. 
 From the south and east it receives the great Guayana rivers: the 
 Caroni, the Caura, and others, rivers of crystalline but ink-black 
 waters originating in the tepuis of the Gran Sabana and leaping 
 down in spectacular falls to mix their waters with the muddy ones 
 of the Orinoco. 
 
 Upstream, not far from its headwaters, the behavior of the 
 Orinoco is, to say the least, curious and disconcerting. Without 
 any apparent reason, the great stream, which at this point already 
 has acquired a girth of some 2,000 feet, divides its waters, and 
 sends southward one-third of its volume through the Casiquiare to 
 join its great competitor of the south, the Amazon, while it con- 
 tinues northward in its course. This bifurcation of the Orinoco 
 has aroused the imagination of scientists and naturalists for many 
 years. It becomes more paradoxical still if one considers that the 
 point of bifurcation is only 400 feet above sea level, but 750 miles 
 from the sea, along the route of the Orinoco, and almost 1,900 
 miles from the sea, via the Casiquiare— Negro— Amazon system. 
 The gradient of the river thus appears insufficient to cause its 
 waters to flow with the swift current they have. 
 
 Downstream from its bifurcation, the Orinoco has, along a 25- 
 mile stretch, the only important rapids in its course. These rapids 
 are the sole obstacle for continuous navigation in small craft 
 from the Gulf of Paria to the mouth of the Amazon. As it ap- 
 proaches the sea, the Orinoco divides again, this time to form the 
 multiple mouths of its great delta. One of these, the Manamo, 
 which debouches into the Gulf of Paria, is the one which "sweetens" 
 the sea of Columbus. 
 
 V. Lake Maracaibo 
 
 The huge petroleum wealth of Venezuela is located principally 
 in the subsurface of Lake Maracaibo. Here are found the largest 
 
1 2 The Caribbean : Venezuelan Development 
 
 accumulations of petroleum in the Western Hemisphere. Why 
 is this zone so rich in petroleum? It is because here, in the enor- 
 mous sedimentary basin, there were, in geological times, a series of 
 circumstances peculiarly favorable to its formation. 
 
 We know that petroleum is of organic origin; that is, it is de- 
 rived from plants and animals that once lived. These organisms, 
 upon dying and being buried together with muds and other sedi- 
 ments in the bottom of sedimentary basins, were changed slowly 
 into petroleum and other hydrocarbons by the effect of a very long 
 and drawn-out chemical process caused by heat, pressure, and 
 time. As more organic matter is deposited under favorable con- 
 ditions, there is a greater possibility that petroleum eventually will 
 be formed. 
 
 The bed of Lake Maracaibo is a great basin of sedimentation, 
 surrounded by mountains. All these muds are deposited little by 
 little on the floor of the lake, where there ensues the beginning of 
 the long process that converts this matter into petroleum. But if 
 this were the whole picture, the lake would soon be filled with 
 mud and would dry up, or the mountains would wear away by 
 the action of the rains and soon there would be no mud. What 
 happens then? One of the most outstanding of geological proc- 
 esses: the bottom of the lake slowly subsides at about the same 
 rate at which the sediments are deposited. At the same time, with 
 a marvelous balance, the mountains continue to rise gradually. 
 
 This explanation, which appears to be a geological fantasy, is 
 nevertheless what actually is happening now and what has hap- 
 pened, in a general way, during many millions of years, and it is 
 easy to demonstrate. Wells drilled in the lake have penetrated as 
 much as 16,500 feet of sedimentary rocks before reaching the 
 granite. That thickness is made up of rocks formed by the harden- 
 ing of muds and sands that were deposited at shallow depths, as is 
 proven by the fact that they contain fossils of shells and other 
 aquatic animals which live in shallow water. During all the long 
 period of many millions of years, when this enormous thickness of 
 sediments was being deposited, the lake has always been relatively 
 shallow, just as it is today. Its greatest depth is about 125 feet. 
 
 Evidence that the mountains have risen is also easy to find: a 
 study of the rocks found on the high peaks of the Andes shows 
 fossils of marine shells and of aquatic animals which lived when 
 those rocks were at the bottom of the sea. These movements— the 
 sinking of the bottom of the lake and the elevation of the moun- 
 
BACKGROUNDS 13 
 
 tains— take place so gradually that they are imperceptible to us. 
 When considered from the point of view of geologic time— many 
 millions of years— the total effect of these movements may be clearly 
 seen. 
 
 This process is not, of course, exclusive in Venezuela to the 
 Maracaibo basin. The Orinoco and the Apure-Barinas basins have 
 similar geological histories, and they also possess rich oil deposits. 
 
 The oil which is formed is naturally distributed sparsely 
 through the enormous thickness of sedimentary rocks in which 
 it had its origin. Under certain favorable conditions, resulting 
 from unequal subsoil pressures and the movement of subterranean 
 water, the dispersed petroleum began to accumulate slowly in 
 porous zones of the rocks, giving rise to the so-called ''fields" of 
 oil that are being developed today. 
 
 Little did Alonso de Ojeda think when he entered the peaceful 
 waters of the lake and saw the "little Venice" of the Indians that 
 under his very feet lay riches that were greater by far than those 
 of El Dorado. 
 
Irving Rouse: archaeology of Venezuela 
 
 Among the papers delivered at the first Caribbean Con- 
 ference of the University of Florida, in 1950, was a discussion of 
 Venezuelan archaeology by Jose M. Cruxent, of the Instituto 
 Venezolano de Investigaciones Cientificas. It was my pleasure to 
 translate this paper into English for the publication which re- 
 sulted from the conference (Cruxent, 1951). Now, twelve years 
 later, our roles are reversed; I am the author of a second paper 
 on Venezuelan archaeology in which Cruxent also figures promi- 
 nently because it presents the results of collaboration between us. 
 It is the summary of a book being published by the Yale Uni- 
 versity Press. 
 
 Our greatest progress has been in the realm of chronology. It 
 was an achievement for Cruxent to be able to note, in his 1950 
 paper, "that certain Venezuelan cultures . . . date from the be- 
 ginning of the Christian Era" (Cruxent, 1951: 150). Now, we are 
 able to trace the Venezuelan Indian back to the time of the last 
 Ice Age, that is, to about 15000 b.c. From that time, he can be 
 shown to have passed through four great epochs: the Paleo-Indian 
 epoch, from 15000 to 5000 b.c; the Meso-Indian epoch, from 
 5000 to 1000 B.C.; the Neo-Indian epoch, from 1000 b.c. to a.d. 1500; 
 the Indo-Hispanic epoch, from a.d. 1500 to the present. 
 
 /. Paleo-Indian Epoch 
 
 The Paleo-Indians are supposed to have entered the New World 
 from Siberia by way of Alaska and central Canada, and to have 
 
 14 
 
BACKGROUNDS 15 
 
 continued southward through the United States and Middle 
 America into South America. The principal evidence for their 
 arrival in Venezuela as early as 15000 b.c. comes from the site 
 of Muaco, near Coro on the west coast, which was excavated by 
 Cruxent in 1959. Muaco consists of a spring, to which the mam- 
 mals of the vicinity came to drink. Man waylaid the animals 
 there, and killed and ate them, as is evidenced by the presence 
 of cut and burned bones and of Paleo-Indian implements in the 
 muck surrounding the spring. Two of the burned bones have 
 been analyzed by the radiocarbon method and have yielded dates 
 of 14920 and 12780 b.c. respectively (Rouse and Cruxent, MS, 
 Appendix). Many of the bones come from animals now extinct, 
 such as the mastodon, the giant sloth, and the New World horse; 
 and this in itself is evidence of great antiquity. 
 
 Muaco does not tell us much about the life of the Paleo-Indians, 
 since they did not actually live there. Places of habitation have, 
 however, been found elsewhere, particularly in the region of El 
 Jobo, inland from Muaco. Here, a people to whom we have 
 given the name "Joboid" lived on a series of successive terraces 
 formed by the Rio Pedregal. The earliest Joboid people, who 
 occupied the uppermost terraces, made only crude choppers and 
 scrapers of quartzite, which, however, might have been used to 
 manufacture wooden spears. Lanceolate spearheads of stone were 
 an innovation of the intermediate terraces and there are also a 
 few stemmed spearheads on the lowest, and therefore the latest, 
 terrace. It is presumed that the spears were used to hunt mammals 
 of the kinds found at Muaco, although no bones were recovered 
 in the sites. 
 
 //. Meso-Indian Epoch 
 
 By 5000 B.C., when the Meso-Indian epoch began, the big-game 
 animals upon which the Paleo-Indians had relied for much of 
 their food had become extinct. Nevertheless, some of the Meso- 
 Indians continued to emphasize hunting, as evidenced by the wide- 
 spread occurrence of stone projectile points throughout Venezue- 
 lan Guiana, especially at the site of Canaima (ibid.). These points 
 are of the same stemmed type which first appeared on the latest 
 terraces of the El Jobo region. 
 
 Elsewhere, the Meso-Indians ceased to manufacture stone points, 
 presumably because they had come to rely upon new sources of 
 
1 6 The Caribbean : Venezuelan Development 
 
 food. Along the coast, they turned to fishing and shell fishing, and 
 in so doing developed maritime skills which enabled them to 
 colonize the offshore islands for the first time. Both on the main- 
 land and on the islands, their places of habitation are marked by 
 large piles of shells, the best known of which is at Punta Gorda, 
 on Cubagua Island off Cumana in eastern Venezuela. Here lived 
 a "Manicuaroid" people, beginning about 2325 b.c, according to 
 a radiocarbon date from the bottom of the site, and continuing 
 until after the time of Christ, as indicated by the appearance of 
 trade pottery at the top of the site. Additional sites of the Mani- 
 cuaroid Indians have been found along the adjacent mainland and 
 on Margarita Island, further offshore; and the Manicuaroid people 
 may also have played a part in the colonization of the West Indies, 
 although this is a disputed point (Cruxent and Rouse, 1958-59: 
 43-55, 111-13; Rouse, 1960). 
 
 The Manicuaroid Indians used bone projectile points instead of 
 the stone points of the Joboid Indians. They made small, bi- 
 pointed stones, possibly for use in slings, and a variety of types 
 of shell implements, including shell gouges fashioned from the 
 outer whorls of conch shells. These gouges were perhaps the most 
 significant invention, since they made it possible to hollow out 
 dugout canoes, with which to move from the coast to the islands. 
 
 A different kind of development seems to have taken place in 
 the interior of Venezuela during the Meso-Indian epoch. We are 
 only beginning to obtain evidence of this development at the site of 
 Rancho Peludo in the Maracaibo Basin, not far from the Colom- 
 bian border, but we can fill out the data from this site with our 
 knowledge of similar sites in other parts of the world, for example, 
 in the Tehuacan Valley of Mexico (MacNeish, 1962). 
 
 At Rancho Peludo and other places in the interior, the Meso- 
 Indians were unable to turn to maritime foods as the Pleistocene 
 game became extinct. Instead, they probably began to rely upon 
 fruits and wild vegetable foods. From these it would have been 
 only a short step to the cultivation of fruits and vegetables, that is, 
 to the beginnings of agriculture. It is unlikely, however, that the 
 first agriculture was very effective; the crops and the techniques 
 for producing them were undoubtedly too rudimentary to do more 
 than supplement the gathering of wild fruits and vegetables. 
 
 Agriculture is indicated at Rancho Peludo by the presence of 
 clay griddles similar to the budares still used in many parts of 
 Venezuela to bake bread made from manioc roots. Clay pottery 
 
BACKGROUNDS 17 
 
 also occurs for the first time; it consists of simple bowls or jars 
 with plain or annular bases, fabric-marked surfaces, and crude 
 applique decoration. The pottery was used both for utensils and 
 for burial urns, and has been dated by the radiocarbon method 
 between 2820 and 445 b.c. (Rouse and Cruxent, 1963). 
 
 ///. Neo-Indian Epoch 
 
 The Neo-Indian epoch began about 1000 b.c. in eastern Vene- 
 zuela, possibly somewhat later in the west. By this time, the crops 
 and techniques for cultivating them had improved to such an 
 extent that agriculture was able to supplant hunting, fishing, and 
 gathering as the principal means of obtaining food. In eastern 
 Venezuela, manioc remained the staple crop, but in the west the 
 Neo-Indians seem to have preferred corn, which had been domesti- 
 cated in Middle America and had spread south- and eastward 
 from there via Colombia (Braidwood and Willey, 1962: 171-72). 
 
 The Meso-Indian way of life survived for a while in certain 
 areas, especially on the east coast and adjacent islands, as already 
 noted. Indeed, a few Meso-Indian tribes, such as the Warrau 
 Indians of the Orinoco Delta (Wilbert, 1956), persisted into the 
 Indo-Hispanic epoch; but most of them turned to the new form 
 of life, adopting not only agriculture but also pottery (unless, as at 
 Rancho Peludo, they already had them). 
 
 Since fragments of pottery are by far the most common artifacts 
 in Neo-Indian sites they must be used as the primary basis of in- 
 terpretation. We have been able to distinguish a large number of 
 local styles and to assemble these into ten series, each of which 
 is distinctive of a separate group of Neo-Indians, as follows. 
 
 1. The Dabajuroid series appears to have had its origin in the 
 pottery of Rancho Peludo, already described in connection with 
 the Meso-Indian epoch. It continued in the same region, that is, 
 within the Maracaibo Basin, throughout the Neo-Indian epoch 
 and, beginning about a.d. 1000, also spread southward into the 
 Venezuelan Andes, northward to the present Dutch islands of 
 Aruba and Curasao, and eastward along the coast as far as 
 Cumana in eastern Venezuela (Rouse and Cruxent, MS, Fig. 9). 
 It is characterized by perforated annular bases, fabric impression 
 on the lower part of the body, corrugation of the neck, applique 
 work and, in the later styles, by bulging, hollow legs and complex 
 designs painted in black and/or red on a white background (ibid., 
 
1 8 The Caribbean : Venezuelan Development 
 
 Fig. 10). These latter traits may well have been obtained from the 
 Tocuyanoid series, to be discussed next. 
 
 2. The Tocuyanoid series centers around Quibor, near Bar- 
 quisimeto at the base of the Venezuelan Andes, where we ob- 
 tained a radiocarbon date of 295 b.c. From there, it apparently 
 spread southeastward into the Llanos and northeastward to and 
 along the coast as far as Maiquetia, the airport for Caracas (ibid., 
 Fig. 11). Between a.d. 300 and 1000 it gave way to a pair of re- 
 lated series, Tierroid (3) and Ocumaroid (4). From its very be- 
 ginning it had hollow, bulbous legs; elaborate curvilinear designs 
 which were either incised or painted in red and black on a white 
 background; and simple modeling and painting of snakes and 
 human faces (ibid.. Pis. 13-16). Many of these traits are also to be 
 found on the pottery of northeastern Colombia and Central 
 America, a fact which led Cruxent to postulate relationships with 
 those areas in his paper at the first Caribbean conference (Cruxent, 
 1951: 154-55). 
 
 3. The Tierroid series, like Tocuyanoid, centers in the region 
 around Barquisimeto, extending down from there onto the west- 
 ern Llanos and up into the Andes of Trujillo and Merida (Rouse 
 and Cruxent, MS, Fig. 13). It dates from a.d. 1000 to 1500. Its 
 pottery continues the Tocuyanoid emphasis upon hollow, bulbous 
 legs and polychrome painting but lacks its incision and modeling 
 (ibid., Pis. 17-19). The Tierroid people were responsible for the 
 two most elaborate kinds of archaeological monuments in Vene- 
 zuela, the calzadas (causeways of earth) on the Llanos and the 
 mintoyes (shaft graves and shrine caves) in the Andes. 
 
 4. The Ocumaroid series succeeds Tocuyanoid in the coastal 
 part of the latter's distribution, that is, in the region from Tucacas 
 to La Guaira. It began about a.d. 500 and some of its styles sur- 
 vived until the arrival of Europeans (ibid.. Fig. 23). It combines 
 the Tocuyanoid form of painting with features of two other series 
 which impinged upon that part of the coast, Dabajuroid (1) and 
 Barrancoid (5); for example, it has corrugation and applique 
 work which are reminiscent of the former series and modeling- 
 incision of the latter (ibid.. Fig. 24). Despite this richness of 
 ceramics, the Ocumaroid people did not produce monuments of 
 any kind; they have left only deposits of refuse. 
 
 5. The Barrancoid series is in two parts rather distant from each 
 other, one in the Valencia Basin on the adjacent coast and the 
 other around the delta of the Orinoco River (ibid., Fig. 17). Our 
 earliest radiocarbon date for the central Venezuelan part of the 
 series is a.d. 260 and for the Orinocan part, 985 B.C. They are 
 characterized by solid annular bases, flanges attached to the rim 
 
BACKGROUNDS 19 
 
 and incised with curvilinear designs, and elaborate modeled-in- 
 cised figures on the vessel wall or on lugs attached to the rim 
 (ibid.. Pis. 31-35). Clay pipes bearing similar decoration occur 
 in association with the central part of the series. Archaeologists 
 have been attracted to the Barrancoid series by the distinctiveness 
 and complexity of its decoration, and have proposed conflicting 
 theories to account for its origin (cf. Cruxent, 1951: 152-53, and 
 Willey, 1958: 372), but these need not be discussed here since 
 they are purely speculative. We do not even know how the two 
 segments of the series were related; we can only theorize that both 
 are derived from a third as yet undiscovered segment on the 
 Llanos de Apure, whence the series may have spread northward 
 via the rios Portuguesa and Pao into the Valencia Basin and 
 onto the coast, and eastward down the Orinoco River to the 
 Barrancas region, to Trinidad, and to northwestern British Guiana. 
 
 6. If there actually was a segment of the Barrancoid series on 
 the Llanos de Apure, it could have been ancestral to the Arau- 
 quinoid series, which arose there during the latter part of the first 
 millenium a.d. and subsequently spread down the Orinoco River, 
 putting an end to the Orinocan segment of the Barrancoid tra- 
 dition about A.D. 1000 (Rouse and Cruxent, MS, Fig. 19). The 
 Arauquinoid series retains certain Barrancoid traits, such as 
 modeled-incised lugs, but is distinguished by the use of sponge 
 spicules as a tempering material, by bowls surmounted with col- 
 lars or small lugs decorated with applique features, and by beveled 
 rims bearing incised and excised designs. The last techniques were 
 also used in the production of cylindrical stamps of clay. The 
 Arauquinoid people built artificial mounds of earth in order to 
 raise their houses above the floods of the rainy seasons. 
 
 7. The Valencioid series, as its name implies, centers in the 
 Valencia Basin, extending eastward through the mountains as far 
 as Caracas, down to the coast in the La Guaira and Rio Chico areas, 
 and out on to the Los Roques Islands, off La Guaira. It dates be- 
 tween A.D. 1000 and 1600 (ibid., Fig. 21). The excavations of Re- 
 quena (1932), Bennett (1937), Osgood (1943), and Kidder (1944) 
 in the mounds around Lake Valencia, have made it the best known 
 of all Venezuelan pottery, though it is relatively simple. It consists 
 of bowls with biomorphic lugs and collared jars bearing faces. 
 The features of both are done in applique work, of which the coffee- 
 bean eye is typical. There is no painting and little incision. Figu- 
 rines, amulets, and urn burials have also been found in the Valencia 
 mounds (Rouse and Cruxent, MS, Pis. 39-46). The Valencioid 
 series is presumably a degeneration from the Barrancoid series (5), 
 with the addition of traits from the Arauquinoid series (6). 
 
20 The Caribbean : Venezuelan Development 
 
 8. The Memoid series is known from the north central Llanos 
 south of Caracas and from the coast around Rio Chico. It was in 
 existence during protohistoric and early historic times. Its simple 
 globular vessels were typically roughened by one of a series of 
 techniques: corrugation, incision, scoring, punctation, the addition 
 of tiny lumps of clay, or the pressing of fingers or fabrics into the 
 wet clay. 
 
 9. The Saladoid series made its appearance in the middle and 
 lower Orinoco Valley by 1000 B.C. from an, as yet, undetermined 
 source. Soon after 1000 b.c, the movement of Barrancoid people 
 into the lower part of the Orinoco Valley split the Saladoid people 
 in two. One group remained in the middle part of the Orinoco 
 Valley (Howard, 1943) while the other moved out through the 
 Orinoco Delta to the northeast coast of Venezuela, Margarita, 
 Trinidad, and on into the rest of the West Indies, overwhelming 
 the Meso-Indian inhabitants of those areas as it went (Rouse and 
 Cruxent, MS, Fig. 28). The two groups persisted in Venezuela 
 until about a.d. 1000, when the southern one became acculturated 
 to the Arauquinoid series (6) and the northern one was transformed 
 into several local variants, including the Guayabitoid series (10) 
 in northeastern Venezuela and the Chicoid series of the Greater 
 Antilles. In its pure form, the Saladoid series was characterized 
 by fiat bases, bowls shaped like inverted bells, vertical strap 
 handles, and white-on-red painted designs. To these were added 
 many Barrancoid traits after the latter Indians moved into the 
 lower Orinoco Valley (ibid., Figs. 29, 30). 
 
 10. The Guayabitoid series may be regarded as a degeneration 
 from Saladoid, in which the simple olla became predominant; 
 handles gave way to small, tabular lugs; painting died out; and 
 modeling-incision was replaced by crude incised and applique 
 designs (ibid., Fig. 33). It was the Guayabitoid people whom 
 Columbus encountered when he discovered Trinidad and the 
 Paria coast in 1498. 
 
 IV. Indo-Hispanic Epoch 
 
 The Europeans first settled Cubagua and Margarita islands off 
 the east coast of Venezuela, and subsequently expanded to the 
 mainland, gradually taking over the coast, the mountains, and the 
 Llanos from the Indians. Unlike the English in North America, 
 they tended to assimilate the Indians, incorporating them in their 
 towns and missions, intermarrying with them and, in general, ac- 
 culturating them to the European way of life. As a result, the 
 
BACKGROUNDS 21 
 
 Indian tribes of Venezuela have retained their identity only in the 
 more remote areas, that is, in the Guianan and Amazonian parts 
 of the country, along the Colombian border, and in the Orinoco 
 Delta, as already noted. 
 
 This process of acculturation is best documented archaeologically 
 at the site of Nueva Cadiz on Cubagua Island. Digging there in 
 December, 1954, Professor John M. Goggin, of the University of 
 Florida, and Cruxent, found a pot full of pearls, which aroused so 
 much interest that the Venezuelan government provided the money 
 for Cruxent to continue the excavations over the next seven years. 
 The ruins at the site have been stabilized, a huge number of arti- 
 facts collected, and it is planned to develop the place as a tourist 
 attraction (ibid.). 
 
 Nueva Cadiz was the first Spanish settlement in all of South 
 America, established soon after the beginning of the sixteenth 
 century to take over the pearl fisheries which the Indians had 
 previously exploited by themselves. The town grew in wealth 
 and commercial importance, and permanent buildings of stone 
 were constructed, including residences for the more prominent 
 citizens, churches, and a monastery. Some buildings were embel- 
 lished with ornate stone sculptures. The pearl fisheries eventually 
 became exhausted, hurricanes and pirate attacks decimated the 
 town, and by a.d. 1550 it had been abandoned (Otte, 1961), though 
 a small group of Indians lingered on in the vicinity. 
 
 The excavations at Nueva Cadiz have uncovered not only Spanish 
 artifacts but also Indian pottery of styles native to various parts of 
 the Caribbean area, which bear witness to the distances from which 
 laborers were brought to the fisheries. There is evidence that the 
 Indians soon abandoned these styles and developed a new, local 
 form of pottery. This in turn survived with modifications through- 
 out the Indo-Hispanic epoch and is still in existence as the folk 
 pottery of the village of Manicuare on the Peninsula of Araya 
 (Cruxent and Rouse, 1958-1959: 116). 
 
 BIBLIOGRAPHY 
 
 Bennett, Wendell C, 1937. "Excavations at La Mata, Maracay, Venezuela," 
 Anthropological Papers of the American Museum of Natural History, vol. 
 36, pt. 2. New York. 
 
22 The Caribbean : Venezuelan Development 
 
 Braidwood, Robert J., and Gordon R. Willey, editors, 1962. "Courses toward 
 
 Urban Life: Archeological Considerations of Some Cultural Alternatives." 
 
 Viking Fund Publications in Anthropology, no. 32. New York. 
 Cruxent, J. M., 1951. "Venezuela: a Strategic Center for Caribbean Archeology." 
 
 In The Caribbean at Mid-Century, ed. A. Curtis Wilgus, pp. 149-56. Gaines- 
 ville: University of Florida Press. 
 Cruxent, J. M., and Irving Rouse, 1958-59. "An Archeological Chronology of 
 
 Venezuela." Pan American Union, Social Science Monographs, no. 6. 2 vols. 
 
 Washington. 
 Howard, George D., 1943. "Excavations at Ronquin, Venezuela." Yale University 
 
 Publications i7i Anthropology, no. 28. New Haven. 
 Kidder, Alfred, II, 1944. "Archaeology of Northwestern Venezuela." Papers of 
 
 the Peabody Museum of American Archaeology and Ethnology, Harvard 
 
 University, vol. 26, no. 1. Cambridge. 
 MacNeish, Richard Stockton, 1962. Second Annual Report of the Tehuacdn 
 
 Archaeological Botanical Project. Andover, Mass. 
 Osgood, Cornelius, 1943. "Excavations at Tocor6n, Venezuela." Yale University 
 
 Publications in Anthropology, no. 29. New Haven. 
 Osgood, Cornelius, and George D. Howard, 1943. "An Archeological Survey of 
 
 Venezuela." Yale University Publications in Anthropology, no. 27. New 
 
 Haven. 
 Otte, Enrique, 1961. Cedulario de la monarquia espanola relativo a la isla de 
 
 Cubagua (1523-1550). 2 vols. Caracas. 
 Requena, Rafael, 1932. Vestigios de la Atldntida. Caracas. 
 Rouse, Irving, 1960. "The Entry of Man into the West Indies." Yale University 
 
 Publications in Anthropology, no. 61. New Haven. 
 Rouse, Irving, and J. M. Cruxent, 1963. "Some Recent Radiocarbon Dates for 
 
 Western Venezuela." American Antiquity, vol. 28, no. 4. Salt Lake City. 
 Rouse, Irving, and J. M. Cruxent, MS. Venezuelan Archeology. In press. 
 
 New Haven: Yale University Press. 
 Wilbert, Johannes, 1956. "Rasgos culturales circuncaribes entre Los Warrau y 
 
 sus inferencias." Memorias de la Sociedad de Ciencias Naturales La Salle, 
 
 vol. 16, no. 45, pp. 237-57. Caracas. 
 Willey, Gordon R., 1958. "Estimated Correlations and Dating of South and 
 
 Central American Cultural Sequences." American Antiquity, vol. 23, no. 4, 
 
 pp. 353-78. Salt Lake City. 
 
Arturo Uslar Pietri : the city of gold and the 
 
 CITY OF JUSTICE 
 
 £\ LENGTHY DISSERTATION on any subject may lack unity 
 and yet contain a wealth of solid information, but a brief sum- 
 mary must necessarily possess not only unity but significant mean- 
 ing as well. This is the problem that faces the writer who is 
 asked to prepare a summary of Venezuela's history for readers who 
 are not familiar with the subject. He must say what Venezuela 
 is and what it has been, without falling into the trap of an empty 
 recitation of names and dates, and he must do his best to make 
 clear history's unity and meaning. 
 
 The first point to be made is the great influence that has been 
 exerted in the building of our country by factors that are extra- 
 neous to it. For example, only one of the three important human 
 figures of Venezuela's history (and the first one to appear) belonged 
 to the soil. He was the Indian, who had derived directly from the 
 climate, the geography, the flora, and the fauna. The second figure 
 to appear, the Spaniard, had absolutely nothing in common with 
 the land. He represented the world beyond and its ideals: ec- 
 clesiastic, a warrior type, lordly and courtly, and the symbol of the 
 proud Castilian who had reconquered Spain from the Moors. 
 The emotions of this spirit found expression in the worship of the 
 Immaculate Conception, in his faith in Saint James (his patron), in 
 the romances of El Cid, in his lofty scorn for work and frugality, 
 
 23 
 
24 The Caribbean : Venezuelan Development 
 
 in the glorification of hidalgoism and pomp, and in personal pride. 
 
 He brought with him a social and political system created by 
 force which he imposed on the land. To complete the picture, he 
 later imported the third important figure in our history, the Negro, 
 to supply the lack of workers. Thousands of husky Africans were 
 disembarked on the Antilles islands and along the coast of the main- 
 land to work the mines and the fields, and to do the jobs at which 
 the Indian had shown himself to be of little worth. With the 
 Negro came another culture; strange new myths, different qualities, 
 and a concept of the world as magic, which joined the order of 
 things that arose not from the land itself but from a fortuitous 
 projection of European history. 
 
 The voyagers to the West Indies, the pilgrims, or the conquista- 
 dors—by whatever name we choose to call them— had left their 
 native land under the drive of forces arising from Spain's history. 
 Perhaps it was an extension of the crusading spirit that had 
 achieved the reconquest of the peninsula; perhaps it was the need 
 to counteract the economic blocade that followed the fall of Con- 
 stantinople and the eastern Mediterranean ports into the hands of 
 the Turks; perhaps it was the urge to compete politically with the 
 Portuguese in the discovery of the New World and to benefit from 
 the new route to India. In any event, they stumbled on America 
 with no idea of what they were going to find and with no adequate 
 preparation for their discovery. Instead of a new ocean route, they 
 found a new world. Instead of the Great Kahn or Prester John, 
 they encountered Antillean and Carib chieftains and the great lords 
 of Tenochtitlan and of Cuzco. They did not discover Hindus 
 or Chinese, but instead an unknown race of half-naked savages, 
 adorned with gold and seeming to live effortlessly in an enviable 
 state of natural bounty. 
 
 Thus what resulted was an artificial order designed to emulate 
 that of proud Castile, sustained from beyond the seas and from its 
 highest stratum by force of arms and alien custom. 
 
 // 
 
 The first phase of the conquest of Venezuela was that of pearls, 
 salt, and slaves. This was the epoch of the founding of Nueva 
 Cadiz on the barren island of Cubagua, between the mainland 
 and Margarita. The conquistadors remained there for something 
 more than the first two decades of the sixteenth century, with their 
 
BACKGROUNDS 25 
 
 houses of cane stalks and adobe, their convent and their church 
 spire, gathering pearls and sending salt and Indian slaves to Santo 
 Domingo. 
 
 About 1530, with the establishment of the coastal cities of 
 Cumana and, particularly, Coro, the first serious effort was made 
 to penetrate the vast mainland area. This step opened a period 
 of more than twenty years, during which the government of Vene- 
 zuela was assigned by the Emperor to the house of Welser, the 
 German bankers to whom Carlos V was heavily in debt for loans 
 granted to finance his European adventures. The blond and ag- 
 gressive Teutons concentrated all their efforts, which were mighty 
 and on the heroic scale, toward one sole objective— not toward the 
 foundation of a prosperous and stable colony, not toward the de- 
 velopment of cities, cultivation of crops, or encouragement of 
 handicraft, but toward the exclusive and feverish search for El 
 Dorado, the fabled city all built of gold and precious stones which 
 shimmered like a glowing coal upon the shore of an unknown lake, 
 and which was ruled over by a monarch who, it was said, was 
 covered daily with a coat of gold dust so that he appeared to be a 
 living statue of the coveted metal. 
 
 The search for El Dorado was the prime mover in the expedi- 
 tions which, for the first time, began to scour Venezuela's territory. 
 Over rugged mountain chains, through jungles, swamps, and plains, 
 marched the armed bands with their horses, their helmets, their 
 Indian guides, and all their impedimenta, fighting and suffering, 
 beyond Lake Maracaibo, beyond the majestic Andes, beyond desert 
 and river to the high plain of Bogota to the Meta and Guainia 
 jungles, to the banks of the Orinoco. The legacy of the fruitless 
 quest for El Dorado, which continued for almost eighty years, was 
 the knowledge of a vast and sparsely populated country, inhabited 
 only by warlike tribes, where food was scarce, where movement was 
 difficult, and where nature was hostile and violent. 
 
 There was no El Dorado, nor were there any rich mines of gold 
 or silver. The rude awakening and disillusionment caused an 
 apathy to set in that was to endure for more than a century, from 
 the founding of Caracas in 1567 to the creation of the Guipuzcoan 
 Company in 1728. What ensued was a long period of frustration, 
 poverty, and isolation. A reading of official documents and of the 
 petitions of the cabildos (town councils) suffices to provide a 
 chilling picture of desolation and want. People did not live, they 
 vegetated without hope. 
 
26 The Caribbean: Venezuelan Development 
 
 During this long period of lethargy the population remained 
 stagnant, and the country's development was limited to the estab- 
 lishment of a few cocoa and sugar plantations and to the slow 
 growth of a few herds of cattle. There were no cities worthy of 
 the name, nothing but isolated villages surrounded by solitude and 
 hostile nature, where a handful of settlers lived in huts, supervising 
 the field work of Indians and Negroes in cultivated areas. 
 
 In this abandoned world a primitive and simple social system 
 evolved, personified by the Spanish governor and the Church. The 
 cahildos, which were the refuge of the Creole's* hope for power, 
 bickered over privileges and taxes and parceled out plots of land. 
 There was a minimum of contact with the outside world. 
 
 While the silver mines and indigenous social organizations of 
 Mexico and Peru were utilized by the Spaniards to develop those 
 viceroyalties and to convert them into important centers of wealth 
 and culture, the government of Venezuela scarcely was noticed in 
 the vast and complex framework of the Spanish empire. 
 
 Ill 
 
 However, important changes occurred in the eighteenth century. 
 The new Bourbon dynasty was progressive and constructive, and 
 disposed to favor the growth and development of the colonies. New 
 jurisdictions were established in the colonial world and new in- 
 stitutions were created, designed to promote foreign trade and to 
 develop agriculture. The Royal Guipuzcoan Company of Caracas 
 was organized in 1728; it acted as merchant, trader, seller, and 
 farmer. Tobacco, indigo, cocoa, and sugar plantations sprang up in 
 the central area of the country. The new wealth not only raised 
 the living standard of the upper classes and the businessmen, but it 
 brought with it smuggling activities from the Dutch and British 
 Antilles. This was an important development, for it brought the 
 Venezuelan into contact with a world of freedom of thought and 
 democratic institutions. 
 
 The Creole discovered the commercial, political, and philosophi- 
 cal backwardness of Spain, and there awoke in him an irrepressible 
 yearning for change and progress. The creole took England, Hol- 
 land, and France as his models. He discovered that it was possible 
 to question, criticize, and to live and prosper in an atmosphere of 
 
 *The tenxi creole means a white person born in Venezuela of Spanish parents. 
 
BACKGROUNDS 27 
 
 freedom and that there was another order of things, different from 
 and perhaps more equitable and conducive to man's progress than 
 that imposed by Spain on her American possessions. 
 
 The independence of the United States at the opening of the 
 century's last quarter offered him the most tempting example of 
 the possibility of establishing the long-dreamed-of democratic re- 
 public in the New World. The proclamation of the ideals of free- 
 dom and the equality of man in the Declaration of Independence 
 became for him a credo inspiring sustained and dedicated action. 
 It was too early for him to realize that history had created pro- 
 found differences between conditions in the English and Spanish 
 colonies. He believed, with Rousseau, that a change of institutions 
 in itself would suffice to release man's natural goodness and convert 
 it into the fruits of freedom and peace. 
 
 In 1777, the government of Venezuela was transformed into the 
 Captaincy General. This was more than just a change in name; it 
 meant a substantial increase in territory with the incorporation of 
 the provinces of Cumana, Maracaibo, Merida, and Guayana, giving 
 the country the physical area it possesses today. There was also a 
 gain in the sense of greater unity and autonomy in the definition of 
 political, judicial, taxing, and military jurisdictions. The measure 
 established Venezuela as a nation. Since that time, there has been 
 one government from the Andes to the mouths of the Orinoco, and 
 Caracas has been the administrative and judicial center where 
 national problems have been resolved. 
 
 Venezuela was then a country of little more than half a million 
 people, with only three towns that exceeded 10,000 inhabitants, 
 and the largest of these, Caracas, boasted scarcely 20,000. The 
 majority of the population lived on plantations, farms, and estates. 
 There was a very strict social division into strata that were sepa- 
 rated by privilege and prejudice. There were four social classes. 
 The white man— Spaniard and Creole— who represented less than 
 one-fifth of the population, held almost all the wealth and did hold 
 all the political power. Public offices were held almost exclusively 
 by Spaniards sent out from the mother country. The white Creoles 
 dominated the cabildos and formed the cultured and propertied 
 class. The largest single group, making up almost half of the 
 population, was the mixed one to which white, Indian, and Negro 
 had contributed with a resulting endless variety of blood mixtures. 
 This class came to be known in colonial times as pardos. Its mem- 
 bers were legally free, but had very limited possibilities of attaining 
 
28 The Caribbean : Venezuelan Development 
 
 power, wealth, or culture. Then came the Indians, who lived in 
 passive political and religious submission in the missions or in the 
 jungles; and finally, the Negro slaves, the principal work force 
 of the country. It was a society in extreme disequilibrium, but 
 highly rigid and stratified down to the last detail. Its two visible 
 heads were the Governor, the representative of the Crown, and the 
 Bishop, who wielded the spiritual power of the Roman Catholic 
 Church. 
 
 IV 
 
 The long and bloody process of achieving independence had 
 this social, economic, and cultural base as its point of departure. 
 Several factors and causes converged in the independence move- 
 ment: the aspiration of the white Creoles to take over complete 
 power; the resentment of the pardos who felt unjustly ostracized 
 and despised by the white oligarchy; the republican ideals of free- 
 dom and equality freshly arrived from France and England; the 
 contagious example of the independence of the United States; the 
 increasing pressure for the elimination of restrictions on trade and 
 economic development; and finally, the crisis precipitated in Europe 
 by the Napoleonic wars which threw the interest of England into 
 the balance in favor of Hispano-American independence and which 
 produced the collapse and disintegration of the Spanish dynasty 
 and, with it, the traditional source of authority in the Bourbon 
 empire. 
 
 The movement toward independence coincided with the zeal to 
 establish a republic modeled after those of France and the United 
 States. A federal, egalitarian, free republic, based on the freedom 
 and equality of its citizens, was one for which Venezuela's three 
 hundred years of colonial life were a poor apprenticeship. 
 
 With Spain invaded by the French, with the disappearance of 
 the legitimate government on the peninsula, with the unleashing 
 of all the forces and pressures that had been working toward inde- 
 pendence, Venezuela formally assumed her autonomy on April 19, 
 1810. A little more than a year later, on July 5, 1811, she pro- 
 claimed her complete independence and proceeded to adopt a 
 constitution based on the French and American models. This 
 constitution, incidentally, was the first to be adopted by a Latin 
 American country. 
 
 It quickly became apparent that independence consisted of 
 
BACKGROUNDS 29 
 
 something more than the mere formal declaration alone; its con- 
 sequence was fifteen years of cruel, continuous fighting, both on 
 and beyond Venezuelan soil, in which one-third of the nation's 
 population perished and a large part of its wealth was wiped out. 
 
 The colonial social system, static, rigidly stratified, and imposed 
 from beyond the seas, was smashed. The new democratic system 
 based on the principles of the 1811 constitution never was able 
 to function. There existed neither the background, the usages, nor 
 the education required for its real application. Nor was it strength- 
 ened by the stark reality of the new society. The great majority 
 of the populace possessed neither property, education, nor employ- 
 ment. Only the white oligarchy, a small minority, was equipped 
 to understand and to practice the principles of a democratic con- 
 stitutional regime. The disappearance of the colonial social order 
 left a power vacuum. The long war had intensified the country's 
 poverty and increased its difficulties, and it had decimated the 
 small group of men who might have taken the leadership in a 
 republic. 
 
 When the struggle for independence turned into actual warfare, 
 democracy became a dead word and was replaced by the brutally 
 efficient and highly simple law of warfare and of war's necessities. 
 
 The leaders produced by the conflict soon realized that the con- 
 stitutional system could not be applied. With remarkable percep- 
 tion, Simon Bolivar saw that there was a profound incompatibility 
 between republican ideals and the reality of the situation. He 
 urged his compatriots to study the present and past of their coun- 
 try rather than foreign constitutions, and to devise and put into 
 effect the institutions that could assure the nation's stability, peace, 
 and progress, or, at least, "the greatest degree of happiness possible." 
 
 This dichotomy between political ideals and social reality per- 
 sisted throughout the nineteenth century. It was a period that 
 rarely saw peace and suffered protracted wars, a period in which 
 democratic institutions rarely functioned and governments of force 
 predominated. The demolished colonial system was not replaced 
 by republican polity, but by a primitive and crude order that arose 
 from the conditions of endemic civil war. The caudillo, or regional 
 strong man, became the symbol of the convulsionary period. 
 
 The history of Venezuela since that time may be viewed as the 
 
30 The Caribbean : Venezuelan Development 
 
 struggle between democratic ideals and principles and the stubborn 
 fact of the caudillo. Congress periodically proclaimed in ringing 
 tones the most liberal and advanced constitutions, and with equal 
 regularity a new caudillo would emerge from the wars to implant 
 his personal dictatorship on the country's poverty, backwardness, 
 and lack of republican experience. The authority of the victorious 
 warrior, backed by his personal army, came to be the basis and 
 the essence of Venezuela's political system. Such a caudillo was 
 Jose Antonio Paez, the dominant figure from 1826 to 1846. His type 
 of rule was respectful of the constitution, and he readily accepted 
 the principle of change in the occupancy of the president's chair. 
 This phase of our caudillo history might be termed its "legalist" 
 period. It was followed, with the Monagas brothers (Generals 
 Jose Tadeo and Jose Gregorio Monagas who, between them, held 
 the presidency from 1846 to 1858), by the dictatorship of the cau- 
 dillo, a period of arbitrary personal power, systematic violation of 
 the constitution, and self-perpetuation in power, either directly or 
 through underlings. 
 
 Important and colorful representatives of this period were the 
 caudillos Antonio Guzman Blanco and Joaquin Crespo. This stage 
 in Venezuela's national life was brought to a close by the most 
 powerful and enduring of all the strong men, Juan Vicente Gomez, 
 who wielded absolute power for more than thirty years. 
 
 But the democratic ideal was a hardy one, and it did not perish 
 during the long rule of the caudillos. It was preserved, even though 
 as a dead letter, in the texts of the various constitutions, and it was 
 sustained as a secret, passionate cult in the spirits of a group of 
 intellectuals who, on rare occasions, enjoyed the fleeting luxury of 
 moments of freedom and legality, but who for the most part suf- 
 fered persecution, prison, and exile. 
 
 This high-minded, steadfast enthusiasm for the republican ideal 
 is one of the determining factors of Venezuelan history; it is, in 
 some respects, analogous with the tenacious and resolute search 
 for the city of El Dorado during the sixteenth century. The Vene- 
 zuelan seeks the city of justice as his forerunners sought the city 
 of gold, with the same dedication, the same indestructible hope, and 
 the same splendid determination. 
 
 VI 
 There was no inclination to accept the primitive and brutal 
 
BACKGROUNDS 31 
 
 system of the caudillo, but neither was it possible to achieve a free 
 and equitable democratic order. The twilight of the caudillo fell 
 with the appearance on stage of a new, nonhuman personage: oil. 
 The rapid development of Venezuela's oil wealth brought about 
 a profound transformation of the country in the short space of 
 thirty years. The population tripled, national income increased 
 more than twenty times, and the national budget thirty times. 
 This affluence, both wisely and poorly used, changed the entire 
 countenance of the nation. Cities grew, transportation facilities 
 multiplied, new and powerful social classes arose, the middle class 
 was strengthened and became larger, industry developed, urban 
 population outstripped the rural, hundreds of new scientific activi- 
 ties were started up, the means of communication were greatly 
 expanded, education and mass culture broadened rapidly, and 
 Venezuela's contacts with the rest of the world were enlarged and 
 intensified. 
 
 All this could mean that we are now closer than ever to the 
 attainment of the democratic ideal for which earlier generations 
 struggled with so little success. Supporting this possibility are the 
 facts of a large middle class, a high average level of education, and 
 a more extensive and equitable distribution of wealth than before. 
 
 Nevertheless, there remain many problems and negative facets 
 in this panorama. Relative well-being and increased wealth have 
 yet to reach a large segment of the population. Population growth 
 is more rapid than that of national income. The youthful sector 
 of the populace is by far the largest (50 per cent of the country's 
 population of 7.5 million is under 20 years of age), without ex- 
 perience and requisite training. And a considerable proportion of 
 the population lacks both the means of subsistence and the ability 
 to work. 
 
 Under these circumstances, the problem of maintaining and 
 consolidating a truly democratic system remains a pressing one, 
 and it is, in fact, the major question facing Venezuela today. It is 
 true that we possess more factors favorable to success than ever 
 before, but we will need a very large measure of insight, of effi- 
 ciency, of steadfastness, and of disinterested self-sacrifice if the high 
 hopes of the men of 1810 are to be converted for the Venezuelans 
 of today and tomorrow into a fruitful fact: the creation of a free 
 and equitable system which will enable the country to grow and 
 to develop its maximum potential with the peaceful and voluntary 
 cooperation of all its sons. 
 
Part II 
 
 EDUCATION 
 
1 
 
4 
 
 IT 
 
 Lorenzo Monroy: Venezuelan educational 
 
 POLICY 
 
 JL HE STRUCTURE OF Venezuela's educational system always 
 has been intimately linked to the social and economic structure 
 of the country.* During the colonial period, the few elementary 
 schools of which there is any record were open only to the children 
 "of the first settlers and of those who served the King." Their 
 doors were not open to "mulattoes and other inferior classes." In 
 point of fact, the type of work that the controlling class needed 
 from the lower classes was rudimentary toil, for which no educa- 
 tion was necessary; there was no need to go to school to learn to 
 work the soil or to do the jobs that had to be done with the scant 
 mineral resources the country then possessed. The first university 
 in Venezuela was established in Caracas in 1723. 
 
 Despite the fact that most of the men who shaped the inde- 
 pendence movement sprang from the landholding oligarchy, they 
 proclaimed the principle of universal education; but, like many 
 other ideals of the period, this goal all but disappeared in the 
 civil wars, anarchy, and impoverishment of the country that marked 
 
 *An understanding of this paper will perhaps be facilitated by a brief 
 definition of some terms employed which have a slightly different meaning, as 
 applied in Venezuela, from their usual meaning in the United States. The 
 Venezuelan educational system is divided into three basic divisions: primary, 
 which includes preschool, kindergarten, and elementary schools; middle, which 
 includes high schools, technical and commercial schools, and normal schools; 
 and superior, which includes pedagogic institutes and the universities. Normal 
 schools and the pedagogic institutes train teachers, but the former train teachers 
 for elementary schools only, and the latter train high school teachers. 
 
 35 
 
36 The Caribbean: Venezuelan Development 
 
 the first sixty years of the republic. All these factors conspired 
 against the establishment of an effective educational system. 
 
 However, in 1870, President Antonio Guzman Blanco issued a 
 decree establishing free and compulsory education. For two decades 
 this measure gave real impetus to education in the country: more 
 than 100,000 children went to school in that period, eight normal 
 schools were established, and on-the-job training was instituted for 
 teachers who had no formal professional preparation. 
 
 New civil conflicts and administrative disorder put an end to 
 this encouraging phase of universal education. The country had 
 again fallen into an epoch of darkness from which it was not to 
 emerge until the death of the dictator, Juan Vicente Gomez, in 
 1935. 
 
 Venezuela's educational situation in that year was deplorable: 
 school registration was only 150,000, about 11 per cent of the 
 population between 7 and 24 years of age; more than 70 per cent 
 of the adult population was illiterate; buildings and other physical 
 equipment were wanting; and the number of trained teachers was 
 infinitesimal. The University had been closed for a number of 
 years. 
 
 On Gomez' death, a movement to revitalize education was begun, 
 only to be rudely interrupted anew in 1948. This movement had 
 become particularly effective during the 1945-48 period; elementary 
 school registration rose to 500,000, normal schools to 5,600, second- 
 ary schools to 22,000, and the three universities then existing to 
 6,000. 
 
 During the three-year period, impressive steps were taken in the 
 development of technical education, teacher training, and anti- 
 illiteracy campaigns (more than 100,000 adults were taught to 
 read and write). For the first time, a teachers' pay scale was 
 adopted, with substantial increases; school attendance was im- 
 proved through the establishment of free lunches and assistance in 
 obtaining clothing, and effective programs of school construction 
 and installation of equipment were carried out. Allocations for 
 education reached a significant 12 per cent of the national budget. 
 
 Just at the time when the movement toward a sound education 
 program was gathering force, another military dictatorship, with 
 a deep scorn for such matters, brought educational progress to 
 a halt for ten years. Budget allotments for education sank to 
 7.6 per cent of the total, which brought about an unprecedented 
 expansion in the number of private schools; it was the private 
 
EDUCATION 37 
 
 sector that was responsible for the greatest share of education's 
 growth during these years. Two private universities were estab- 
 lished, in addition to scores of private elementary, normal, and 
 secondary schools. Nevertheless, the available facilities remained 
 far below the level required to satisfy the country's needs. Con- 
 sequently, there should be no surprise at the growth of illiteracy, 
 which rose from 33 per cent in 1950 to 57 per cent in 1958, or that 
 only 32 per cent of the school population (7 to 24 years) actually 
 attended school. 
 
 After the overthrow of the dictatorship in 1958, there again 
 arose a fierce determination to create an educational system at 
 the service of the populace, and education became a primary con- 
 cern of the government. As a result, in the period from 1958 to 
 the present, Venezuela's educational program acquired such rhythm 
 and achieved such effects that it may be favorably compared 
 with any education program in any country in the world, in this 
 or any other period. School registration for the period 1935-62 is 
 shown in Table 1. 
 
 TABLE 1 
 
 Academic 
 
 School 
 
 Population* 
 
 (7 to 24) 
 
 
 Attending 
 Schoolt 
 
 
 Year 
 
 Number 
 
 
 Per Cent 
 
 1935-36 
 
 1956-57 
 1961-62 
 
 1,328,000 
 2,500,000 
 2,950,000 
 
 150,000 
 
 800,487 
 
 1,574,000 
 
 
 11.2 
 
 32 
 
 50 
 
 *Estimated. 
 
 fGrade school through university. 
 
 As may be seen during the last five years, some 770,000 students 
 have been added to the active school population, an increase of 96 
 per cent. Current registration is 20.5 per cent of the total popula- 
 tion, perhaps the highest of any country in Latin America. 
 
 Some sectors of opinion have expressed reservations about this 
 unusual growth rate in our educational system, pointing out that 
 there are other urgent problems, equally demanding of attention, 
 in the public sector. But the philosophy which stands behind the 
 government's educational program holds education to be a funda- 
 mental instrument for the social and economic development of 
 the country, whose failure would make it impossible for the Vene- 
 
38 The Caribbean : Venezuelan Development 
 
 zuelan people to have access to the benefits of modern scientific 
 and technological process. In this connection, it is particularly 
 significant that 53 per cent of Venezuela's population, which has 
 an annual growth rate of 3.5 per cent, is less than 20 years of age. 
 It is imperative to provide these new generations with adequate 
 cultural equipment if we are going to secure the future of the 
 country on more just and stable foundations. This is the thinking 
 that guides the educational program of Venezuela, which is rated 
 the highest priority in the plans of the democratic government. 
 
 /. Problems and Aspects of the Educational System 
 
 In accordance with the provisions of the Education Law of 
 1955, the Ministry of Education is authorized to set up experi- 
 mental schools with different study programs. Some schools of this 
 type now exist, particularly in the field of training of elementary 
 teachers, with the aim of testing possible reform measures in the 
 system. 
 
 Budget. At both the Punta del Este conference and the Santiago 
 (Chile) conference on education and socioeconomic development, 
 Latin American countries were urged to establish as a goal the 
 setting aside of 4 per cent of gross national product during the 
 next decade for education. Venezuela is now approaching this goal. 
 Total expenditures on education during the 1961-62 academic year 
 were Bs.l, 134,100,000, or 3.7 per cent of the Gross National Product 
 (GNP) of Bs.30,3 12,000,000. The increase in expenditures over 
 1956-57 was 166 per cent, while the GNP increased only 42 per cent, 
 which gives an idea of the effort that has been made in the field of 
 education. Education's place in the budget is now a respectable 
 one, with an allocation of Bs.879 million, or 14 per cent of the 
 total. Table 2 illustrates the development of these expenditures, 
 in relation to GNP, and also shows the amounts expended by the 
 private sector in education. 
 
 Annual Per Student and Per Inhabitant Cost. The annual cost 
 per student in the different fields of education in 1962 is shown 
 in Table 3. 
 
 Including both official and private expenditures, it is estimated 
 that Venezuela spends Bs.l45 (equivalent to $43) per inhabitant 
 per year on education, one of the highest per capita rates in the 
 world. 
 
 Enrollment. As a logical consequence of the increasing support 
 
EDUCATION 
 
 39 
 
 by both government and the private sector for education, enroll- 
 ment has increased almost vertically, as demonstrated in Table 4. 
 
 TABLE 2 
 
 
 1956-57 
 
 1962 
 
 
 Change 
 
 Area of Expenditure (Millions of Bs.) 
 
 (Millions of Bs.) 
 
 (Per Cent) 
 
 National schools 
 
 172.5 
 
 586.0 
 
 
 240 
 
 State schools 
 
 54.9 
 
 156.0 
 
 
 184 
 
 Municipal schools 
 
 8.1 
 
 16.4 
 
 
 100 
 
 Other ministries 
 
 17.9 
 
 45.3 
 
 
 152 
 
 Autonomous institutes 
 
 15.5 
 
 75.9 
 
 
 389 
 
 Private schools* 
 
 156.2 
 
 254.5 
 1,134.1 
 
 » 
 
 63 
 
 Totals 
 
 425.1 
 
 166 
 
 Gross National Product 
 
 21,366.0 
 
 30,312.0 
 
 
 41.7 
 
 •Estimated. 
 
 TABLE 3 
 
 
 
 
 Schools 
 
 
 Annual Cost 
 
 in Bs. 
 
 Primary 
 
 
 
 271 
 
 
 Secondary 
 
 
 
 759 
 
 
 Normal 
 
 
 
 1,096 
 
 
 Industrial 
 
 
 
 763 
 
 
 Commercial 
 
 
 614 
 
 
 Artistic 
 
 
 
 770 
 
 
 Pedagogic 
 
 institutes 
 
 
 2,115 
 
 
 University 
 
 
 
 6,130 
 
 
 TABLE 4 
 
 
 
 
 
 Per Cent 
 
 Branch 
 
 1956-57 
 
 1961-62 
 
 
 Change 
 
 Preschool and Primary 
 
 694,193 
 
 1,297,965 
 
 
 87 
 
 Secondary 
 
 52,420 
 
 122,311 
 
 
 133 
 
 Normal 
 
 7,697 
 
 32,434 
 
 
 321 
 
 Technical 
 
 17.021 
 
 49,602 
 
 
 191 
 
 Pedagogic institutes 
 
 322 
 
 2,536 
 
 
 687 
 
 Universities 
 
 8,434 
 
 29,205 
 
 
 231 
 
 Adult Education 
 
 20,000 
 
 36,000 
 
 
 80 
 
 Totals 
 
 800,087 
 
 1,570,053 
 
 
 96 
 
40 The Caribbean : Venezuelan Development 
 
 As a further illustration which will help understand Venezuela's 
 present educational situation, Table 5 shows enrollment in branches 
 of study and by grades for 1961-62. 
 
 
 
 
 TABLE 5 
 
 
 
 
 
 1st 
 
 2d 
 
 3d 
 
 4th 
 
 5th 
 
 6th 
 
 
 Branch 
 
 Year 
 
 Year 
 
 Year 
 
 Year 
 
 Year 
 
 Year 
 
 Totals 
 
 Preschool and 
 
 
 
 
 
 
 
 
 Primary 
 
 443,640 
 
 271,008 
 
 226,906 
 
 161,832 
 
 113,665 
 
 80,914 
 
 1,297,965 
 
 Secondary 
 
 47,699 
 
 29,762 
 
 21,241 
 
 13,960 
 
 9,649 
 
 
 122,311 
 
 Normal 
 
 7,955 
 
 10,174 
 
 9,158 
 
 5,147 
 
 
 
 
 32,434 
 
 Industrial 
 
 9,798 
 
 3,833 
 
 1,986 
 
 893 
 
 484 
 
 207 
 
 17,201 
 
 Commercial 
 
 15,325 
 
 5,966 
 
 2,730 
 
 706 
 
 558 
 
 
 
 25,285 
 
 Other 
 
 
 
 
 
 
 
 
 technical 
 
 5,141 
 
 1,272 
 
 511 
 
 90 
 
 21 
 
 81 
 
 7,116 
 
 Pedagogic 
 
 
 
 
 
 
 
 
 institutes 
 
 1,096 
 
 644 
 
 522 
 
 274 
 
 
 
 2,536 
 
 University 
 
 13,063 
 
 6,263 
 
 4,705 
 
 3,202 
 
 1,625 
 
 347 
 
 29,205 
 
 Totals 
 
 543,717 
 
 328,922 
 
 267,759 
 
 186,104 
 
 126,002 
 
 81,549 
 
 1,534,053 
 
 An analysis of the data in Table 5 leads to the following con- 
 clusions: 
 
 1. A ready acceptance by the populace as a whole of the govern- 
 ment's education policy, as demonstrated by the steady enrollment 
 increase in all branches. 
 
 2. Because of the great influx of recent years, some 57 per cent 
 of total enrollment is found in the first two years. 
 
 3. This great tide will swell the upper grades progressively dur- 
 ing the next three years. 
 
 4. The meager enrollment in the upper grades of industrial edu- 
 cation reflects the abandonment into which this field of instruc- 
 tion had fallen at a time when technical training is sorely needed 
 for the nation's development. 
 
 5. Artistic education is underdeveloped. 
 
 6. Normal schools will turn out 24,000 elementary teachers in 
 the next three years. 
 
 7. The first two years at the university level contain two-thirds of 
 the total, which means a sharp increase in university graduates in 
 coming years. 
 
 8. Preschool enrollment is disproportionately low because, for 
 the time being, available resources are being concentrated on pri- 
 mary education. 
 
EDUCATION 41 
 
 Children Not Enrolled in School. Venezuela's efforts to incorpo- 
 rate all its school age population into the education system have 
 earned recognition at several UNESCO (United Nations Educa- 
 tional, Scientific, and Cultural Organization) and OAS (Organiza- 
 tion of American States) conferences. At the third meeting of the 
 Inter-Governmental Committee in Mexico, in 1960, Venezuela held 
 first place in the application of Project No. 1, with an increase in 
 enrollment of 42 per cent. In the 1961-62 academic year, some 
 1,130,000 children of 7 to 13 were enrolled in primary and middle 
 education, representing 86 per cent of this age group in September, 
 1961. The remaining 190,000 children who were not enrolled in 
 school were, in large part, physically, mentally, or economically in- 
 capable of school attendance. It is estimated that 90,000 children 
 of this group could be educated in special schools which the country 
 has not yet been able to build, leaving 100,000 relatively normal 
 children not enrolled in school. 
 
 The situation of the 14-18 age group is completely different; en- 
 rollment among this group in 1961-62 was 300,000, out of a total of 
 800,000, or 37 per cent, leaving a deficit of 500,000. Since some of 
 the group will attend some kind of school before reaching the age 
 of 18, it probably would be accurate to place the deficit at 480,000. 
 Enrollment in the middle education bracket undoubtedly will in- 
 crease rapidly, due, first, to the larger numbers emerging from the 
 primary bracket and, second, to the growing readiness of Vene- 
 zuelan families to see that their children are educated. It is prob- 
 able that in 1965-66, enrollment will climb to 360,000 in middle 
 education, and if to this figure is added the number of the 14-18 
 age group still in primary education (about 70,000) the total en- 
 rollment for the age group will be around 430,000. 
 
 Urban-Rural Percentage. Population distribution in Venezuela 
 at present is 68 per cent in urban areas and 32 per cent in rural 
 areas, with a marked tendency toward further increase in the 
 former. According to the Ministry's figures, 76 per cent of primary 
 students attend city schools and 24 per cent go to rural schools, 
 which indicates a clear deficit in attendance among the rural 
 population. 
 
 Enrollment by Sexes. The enrollment in all branches of educa- 
 tion, by sexes, during 1960-61, is shown in Table 6. 
 
 At present the division in primary schools is about even, but it 
 is expected that girls will begin to predominate in coming years. 
 The present line-up of elementary school teachers is 81 per cent 
 
42 The Caribbean : Venezuelan Development 
 
 women and 29 per cent men; the high proportion of female stu- 
 dents in the normal schools indicates that this percentage will in- 
 crease still more in the future. By the same token, the entrance 
 of women into middle education as teachers is also increasing and, 
 as Table 6 shows, women now represent 57 per cent of enrollment 
 in the pedagogic institutes. In most of the other branches, the male 
 sex is overwhelmingly predominant, although it is expected that 
 female enrollment will increase gradually in the future. 
 
 TABLE 6 
 
 
 Per Cent 
 
 Branch 
 
 Male 
 
 Female 
 
 Primary 
 
 51 
 
 49 
 
 Secondary 
 
 64 
 
 36 
 
 Normal 
 
 13 
 
 87 
 
 Technical 
 
 88 
 
 12 
 
 Pedagogic institutes 
 
 43 
 
 57 
 
 Universities 
 
 71 
 
 29 
 
 Withdrawals. The increases recorded in school enrollment in 
 recent years have been offset to a certain extent by the high ratio 
 of student withdrawals at all levels. This ratio in 1960-61 was 17 
 per cent in primary schools, 14 per cent in secondary schools, and 
 9.3 per cent in normal schools. Among the principal causes of this 
 are the low economic status of families concerned, the geographical 
 dispersion of the population which makes it difficult for students 
 to reach school, seasonal work, the lack of training of teachers, a 
 deficient system of examinations and promotions, inadequate build- 
 ings. Withdrawals and abandonment also have an efEect on the 
 large annual enrollments, on the number of students who remain 
 several years in lower grades, and on low rendition by students. 
 
 Repeating Students. The number of repeating students in 1960-61 
 in primary schools was: first grade, 58.7 per cent; second grade, 
 13.9 per cent; third grade, 11.2 per cent; fourth grade, 8.9 per cent; 
 fifth grade, 5.3 per cent; sixth grade, 2 per cent; average, 19 per cent. 
 
 The same situation is found in other educational levels although 
 not in such an intensive degree. The high number of repeating 
 
EDUCATION 43 
 
 students is due to causes similar to those of withdrawals. The situa- 
 tion is particularly serious in the first grade of primary schools and 
 is a direct reflection of the low technical quality of the teachers of 
 this grade. 
 
 Age Disparity. Another serious anomaly in the present situation 
 is the disparity between students' ages and the grades in which they 
 are enrolled. For example, only 44 per cent of the students in the 
 first and second primary grades fall within the normal age brackets 
 of 7-8 and 8-9 years, respectively. This disparity carries through 
 to the large number of primary students above 13, who, in 1961-62, 
 represented 14 per cent of total enrollment. The situation is due to 
 withdrawals, repeating students, and to the fact that, until recent 
 years, there was a very large number of children for whom school 
 facilities simply did not exist. Fortunately, the educational pro- 
 gram now being carried out is improving this particular problem 
 rapidly. 
 
 Teacher Situation. Only 36 per cent of the 47,354 teachers in 
 our educational system are graduates of the normal schools 
 or pedagogic institutes. The breakdown by the various branches of 
 education is shown in Table 7. 
 
 TABLE 7 
 
 Graduates 
 Branch Teachers Per Cent 
 
 46 
 
 19 
 
 9 
 
 4 
 
 Totals 47.354 36 
 
 The situation in primary education will improve considerably 
 within the next three years as the graduates of the normal schools 
 and on-the-job training programs come into activity, raising the 
 proportion of certificated teachers to 80 per cent. However, in 
 middle education, the prospects are less promising because of the 
 
 Preschool and Primary 
 
 35,267 
 
 Secondary 
 
 4,816 
 
 Normal 
 
 1,952 
 
 Technical 
 
 2,226 
 
 Pedagogic institutes 
 
 209 
 
 Universities 
 
 2,884 
 
44 The Caribbean : Venezuelan Development 
 
 low enrollment in pedagogic institutes and because a teacher train- 
 ing program for the field of technical education has not yet been 
 started, which explains the presence of 1,200 foreign teachers in 
 this division. The faculties of the universities are, in general, 
 graduates of the universities themselves and their qualifications are 
 determined by their own provisions, in accordance with the au- 
 tonomy of these institutions. 
 
 Teacher Differentiation by Sex. There is now a strong majority 
 of women among primary teachers, a condition which will become 
 more pronounced with the high percentage of girl students in 
 normal schools. The same tendency is noted, although to a lesser 
 degree, in middle education due to the predominance of girls in 
 enrollment at the pedagogic institutes, now 57 per cent of the total. 
 The increasing participation by women in university careers, a 
 recent development, has also raised the number of women on uni- 
 versity faculties, although the percentage still is low. Details of 
 the general situation are given in Table 8. 
 
 TABLE 
 
 Per Cent 
 
 Branch 
 
 Men 
 
 Women 
 
 Preschool and Primary 
 
 19 
 
 81 
 
 Secondary 
 
 68 
 
 32 
 
 Normal 
 
 60 
 
 40 
 
 Technical 
 
 74 
 
 26 
 
 University 
 
 90 
 
 10 
 
 //. Results of Educational Activities 
 
 The preceding review of some of the outstanding aspects of 
 Venezuela's educational system discloses a typical case of horizontal 
 development, marked by several undesirable inheritances from the 
 past. At present, our education is undergoing a rebirth and is in 
 the process of readjustment and consolidation. Consequently, the 
 results in terms of student development— evaluated through a sys- 
 
EDUCATION 45 
 
 tern o£ outdated examinations and incomplete statistics— must be 
 considered as very far from satisfactory. Thus, the results of the 
 final examinations of July, 1962, show an average of 66 per cent 
 in the primary field who passed all their examinations, ranging 
 from 50 per cent in the first grade to 84 per cent in the sixth. In 
 secondary education, the average was 38 per cent, the range going 
 from 33 per cent in the first year to 69 per cent in the fifth. The 
 normal school average was 44.5 per cent, ranging from 38.5 per cent 
 in the first year to 82 per cent in the fourth. Make-up examinations 
 are given in September and December of each year, and the results 
 obtained raise these percentages considerably. 
 
 Another index by which results may be measured is the conti- 
 nuity of students through their school years, and in this respect 
 the statistics are encouraging. In the primary schools, the figure 
 for the years 1954-55 to 1959-60 was 27.1 per cent, and this had 
 risen to 33.4 per cent in the period from 1956-57 to 1961-62, an in- 
 crease of 6.3 per cent. A similar trend may be noted in secondary 
 education; the rate rose from 39 per cent in the period from 1955- 
 56 to 1959-60 to 44.4 per cent in 1961-62, a rise of 5.4 per cent. 
 
 Literacy Program. Venezuela under her present democratic gov- 
 ernment has carried out a remarkable literacy program, and in the 
 first three years of its operation some 1,070,000 persons of more 
 than 10 years of age have been taught to read and write. The 
 1961 census showed that the number of illiterates in the country 
 has been reduced to 1,357,108, approximately 28 per cent of the 
 population, and it is fully expected that illiteracy eventually will 
 be cut to 10 per cent. Our literacy program has earned inter- 
 national recognition, and Venezuela has provided materials and 
 technical assistance for the literacy programs of Panama, Honduras, 
 and Bolivia. 
 
 School Construction. In 1958, of 8,969 schools existing in the 
 country, only about 900 of them operated in adequate buildings, 
 which had been constructed in a period of 54 years. The remaining 
 schools were conducted in rented buildings or in inadequate facili- 
 ties that were thoroughly unfitted for the schooling function. 
 
 Given this situation, plus the tremendous expansion of educa- 
 tional activities in general, the government devised an ambitious 
 school construction program and put it into effect with the co- 
 operation of state and municipal governments. 
 
 The results obtained to date have improved the situation con- 
 siderably. In a period of only three years, 1,322 buildings for pri- 
 
46 The Caribbean : Venezuelan Development 
 
 mary schools have been built and put into operation, representing 
 an investment of approximately Bs.327 million. Construction costs 
 are estimated at Bs. 1,230 per student. The new buildings contain 
 5,344 classrooms which, with those already in existence, give our 
 system a total of 1 1,036. 
 
 Many more school buildings are still needed, for it is estimated 
 that there is a deficit of 7,000 classrooms, and at the current estimate 
 of cost-per-student this construction will require an investment of 
 some Bs.400 million. But the short-term building program to supply 
 the deficit has already begun. 
 
 The major problems which we must deal with in the near future 
 involve the improvement of the results of our teaching. It is im- 
 possible to set forth all these problems in detail, but some of the 
 more important ones are discussed in the following paragraphs. 
 
 Quantitative Problems. To the existing deficit of 7,000 pri- 
 mary classrooms must be added 500 each year for the normal 
 increase in enrollment. By the same token, construction of 
 classrooms and shops for middle education is needed to meet present 
 inadequacies and to make provision for the large increases that will 
 occur in the near future as children move up from primary schools. 
 And the same process will make its effects felt in the needs of 
 higher education, particularly if the universities diversify their 
 curricula to meet the needs of the economic and social development 
 of the country. 
 
 The deficit in the primary education picture is not restricted 
 to classrooms. In the matter of desks alone, there is a deficit 
 of 35 per cent, in blackboards of 33 per cent, and similar or 
 greater deficits exist in all classroom equipment, such as cabinets, 
 shelves, bookcases, and seats. 
 
 Included in the category of teaching materials is the equipment 
 needed by both teachers and students, especially those in the pri- 
 mary grades. Because of the low economic level of many, perhaps 
 the majority, of families of primary age students, the legal man- 
 date that primary education is to be compulsory and free must be 
 supplemented by free supplies of text books, readers, notebooks, 
 pencils, paper, and other tools of the classroom. Unfortunately, 
 this cannot be done because of lack of funds. A conservative esti- 
 mate of the cost of such measures is Bs.15 million. In middle 
 education, it is equally necessary to provide a greater number of 
 shops, laboratories, map collections, audiovisual aids, and other 
 equipment. 
 
EDUCATION 
 
 47 
 
 Aid Programs. Despite substantial advances in free services for 
 students, including food, clothing, and scholarships, there is an 
 urgent need for at least doubling the amounts spent for dining 
 rooms and scholarships. In 1962, expenditures for these services 
 (including those on a national, state, and municipal level) ex- 
 ceeded Bs.60 million. This amount, nevertheless, falls far short 
 of meeting the need. 
 
 Teacher Training. Now that the training of teachers for primary 
 grades is well on the way to solution, steps must be taken to expand 
 the training of middle-level teachers. It will be necessary to reform 
 and increase the facilities of the pedagogic institutes so that they 
 will be able to graduate an annual quota of teachers that will per- 
 mit gradual covering of the high existing deficit plus the new re- 
 quirements deriving from the growth of secondary and technical 
 education during the next few years. 
 
 Reform of Study Plans and Programs. The study plans and pro- 
 grams now being used in primary education date from 1944, while 
 those of secondary education were revised provisionally in 1961. 
 The former, consequently, are antiquated and not in keeping with 
 the social and economic growth of the country. Their reform is 
 indispensable. To that end, the Ministry has named a special com- 
 mission, attached to the Planning Office, which will draw up new 
 plans and programs after consultation with teachers and with social 
 groups interested in improving the content of our teaching. 
 
 Training of Educational Leaders. The first class of primary 
 school supervisors has just completed its first year of study, and 
 vocational classes are now being held for 600 directors and assis- 
 tant directors of schools. It would be advisable to systematize this 
 kind of study and to extend it to middle education. The success of 
 the school system depends to a large extent on adequately trained 
 supervisors and school directors. 
 
 Educational Planning. The Planning Office of the Ministry has in 
 hand well-advanced studies in basic research of a social and statis- 
 tical order. In the basis of these studies, short-, medium-, and 
 long-term administrative programs and goals are drawn up, and the 
 budget of the Ministry is also based on them. Seven special com- 
 mittees have been named by the Ministry to assist in drawing up 
 these plans dealing with organization, financing, administration, 
 and teaching. 
 
 Legal Questions. The reform of the present organization of the 
 Ministry is expected to produce substantial benefits in providing 
 
48 The Caribbean : Venezuelan Development 
 
 an increased degree of functional efficiency and greater operational 
 flexibility. It is also to be hoped that Congress will act to rewrite 
 the 1955 Education Law, which does not conform to provisions of 
 the 1961 constitution nor to the general advancement of the coun- 
 try in recent years. 
 
 Financial Matters. A study of the sources of financing will be 
 of supreme importance in aiding official organizations to stand up 
 to the impact of the dizzying growth of educational services at the 
 middle and superior levels in coming years. Substantial economic 
 obligations must be assumed as a result of increased enrollment 
 at all levels, the urgent construction needs, and the demand for 
 equipment, increased supervision, and other problems. This is an 
 unprecedented expansion which will continue for a number of 
 years, until the rate of development stabilizes. Although the gen- 
 eral outlines of this expansion are known and studies have been 
 made for plans to deal with it, it is impossible to estimate with 
 certainty the amount of money that will be needed each year, al- 
 though tentative calculations have been made. 
 
 It may be possible to offset these large expenditures somewhat by 
 regularizing a number of abnormal situations deriving from the 
 period prior to 1958, such as the volume of students above normal 
 age, repeating students, and withdrawing students. At the same 
 time, it must be remembered that special facilities must be con- 
 structed for not less than 90,000 physically, mentally, and eco- 
 nomically defective students. The analysis of the sources of financ- 
 ing for these imperious needs is a task for specialized agencies, and 
 it is probable that recourse may have to be had to international 
 sources as provided in the agreements signed in this area by 
 Venezuela. 
 
 Orientation of Fundamental Policy. Venezuela's over-all educa- 
 tion policy must be capped by a clear-cut position with respect to 
 the type of man that is to be shaped in our schools. This is a prob- 
 lem of social philosophy that arises from constitutional and legal 
 provisions; if it is not solved, all our work in education would lose 
 its fundamental meaning. 
 
 And this basic position must be projected to all sectors of the 
 school system's organization and operation, such as teacher training, 
 study plans and programs, supervision of teaching, evaluation and 
 promotion of students, and teaching methods. 
 
 The basic need of this problem, there can be no doubt, is to 
 shape a type of free, responsible, and productive man who is capable 
 
EDUCATION 49 
 
 o£ being sufficient unto himself as a member of the community and 
 of serving effectively the fundamental interests of his own com- 
 munity and of the nation. He is the man of our developing de- 
 mocracy on whom rest all the hopes for the future of the country. 
 The definition of the image of the Venezuelan man needed for our 
 times must be based on a profound knowledge of our historical 
 development, our most cherished traditions, and our characteristics 
 as a young and developing people. 
 
 Basic to this point are the studies of the economic and social 
 development of the country and the projection of short-, medium-, 
 and long-term plans which different government agencies are draw- 
 ing up for industrial, agricultural, fishing, housing, health, highway, 
 communications, and immigration programs. Such studies are not 
 the direct responsibility of the Ministry of Education, but our 
 Planning Office is well aware of the advances achieved by these 
 specialized agencies in determining the number of highly skilled 
 technicians and specialized labor required by the government's 
 plans for social and economic development, and the general ten- 
 dencies followed in our education system conform to these goals. 
 
 All our educational authorities are also well aware that if our 
 people receive, in increasing degree and quantity, a higher educa- 
 tional level, it will be reflected in higher indices of productivity and 
 in the general welfare of the community. 
 
5 
 
 Z? 
 
 Francisco De Venanzi: the role of the 
 
 AUTONOMOUS STATE UNIVERSITY 
 
 /. Historical Summary 
 
 V^ARACAS, Venezuela's capital, was founded by Diego de Lozada 
 in 1567. In 1589, the governing council felt it necessary to dispatch 
 an envoy to the court of King Philip II in Spain with a series of 
 requests for the small city of 2,000 souls and for the provinces. 
 Among the requests presented to the King was one for adequate 
 means to satisfy the cultural needs of the colony. An ancestor of 
 our Liberator, who bore the same name, Don Simon de Bolivar, 
 was selected as the emissary, and he carried out his mission suc- 
 cessfully. On his return in 1593, he was able to report that the 
 royal assent had been granted to requests for the establishment of 
 a class in grammar and a seminary. The latter, which was named 
 the Tridentine Seminary of St. Rose of Lima, was founded in pro- 
 visional form in 1641, was improved somewhat in 1673, and nine 
 years later, in 1682, was installed on a definitive basis. 
 
 In order to obtain their doctorates, the graduates of the seminary 
 had to make a difficult and dangerous journey, often placing their 
 lives in jeopardy, to Mexico, Santo Domingo, or Santa Fe. Bishop 
 Escalona y Calatayud took a keen interest in raising the status of 
 the seminary to that of a university, but it was only after great 
 difficulties that he was able to persuade King Philip V, in 1721, to 
 give his approval and to issue a royal certificate attesting the change. 
 The following year, Pope Innocent XIII also approved the new 
 university through a papal bull. The inauguration of the Royal 
 
 50 
 
EDUCATION 51 
 
 and Pontifical University of Caracas took place in a solemn cere- 
 mony held August 11, 1725. The Canon of the Cathedral of 
 Caracas, Francisco Martinez de Porras (who was also Rector of the 
 seminary), was named its first Rector, 
 
 In 1785, the Seminary College of San Buenaventura was founded 
 in the high Andean city of Merida, and this institution was raised 
 to university status in 1810 by the order of the Patriotic Junta of 
 that city. The previous year, the College had been granted authori- 
 zation by King Charles IV to establish courses in grammar, philos- 
 ophy, canon law, and the sacred scriptures and to issue degrees in 
 those studies. 
 
 Of much more recent date was the foundation of the remaining 
 state universities. The University of Zulia, created May 29, 1891, 
 was closed by order of President Cipriano Castro in 1904 and not 
 reopened until October 1, 1946. The University of Carabobo at 
 Valencia was inaugurated in 1958, and the University of Oriente 
 (East) began its activities in 1960, but does not as yet have au- 
 tonomy. The University of Lara, at Barquisimeto, is in the process 
 of organization. These, with the private universities, Catolica An- 
 dres Bello and Santa Maria of Caracas, complete the list of centers 
 of higher learning which now exist in Venezuela. 
 
 //. The Evolution of University Autonomy in Venezuela 
 
 The slow" processes of time that led to the establishment of 
 centers of free analysis, which, in the final instance, is what au- 
 tonomous universities represent, were carried forward principally 
 in Central University, the chief center of higher learning. 
 
 The first expression of university autonomy occurred in 1780 as 
 a result of a conflict when the Chancellor, or Director of Studies, 
 Don Francisco Fernandez de Leon, a Canon of the Cathedral who 
 had jurisdiction over the academic activities of the University 
 (Maestrescuela), became involved in a violent controversy with 
 the Rector and the faculty. The situation reached such a point that 
 the Chancellor detained the Rector in the University and prevented 
 attempts by the Bishop at mediation. When news of this reached 
 Spain, Charles III issued a royal decree in 1784, separating the 
 University from the Seminary and authorizing the election of the 
 Rector every two years by "the full faculty of Doctors." The decree 
 also stipulated that the Rector must be, in alternate years, a reli- 
 gious and a lay person. Autonomy was maintained with the advent 
 
52 The Caribbean : Venezuelan Development 
 
 of independence and the University acquired the character of a lay, 
 liberal institution, open to all, regardless of race, class, or beliefs. 
 
 During the government of Jose Tadeo Monagas, there was open 
 interference with the principle of autonomy as a result of the Law 
 of 1849, which opened the way for the removal of professors un- 
 sympathetic to the government and forbade the participation of 
 these men in the competition for university posts. The complete 
 suppression of autonomy occurred in 1883 under the administration 
 of President Antonio Guzman Blanco when the appointment and 
 removal of faculty members was taken over by the government and 
 university property was ordered sold. The government took over 
 administration of all universities. 
 
 The education law of 1940, sponsored by Arturo Uslar Pietri 
 during the government of Eleazar Lopez Contreras, began the 
 movement to restore autonomy. Under the terms of this law, each 
 school of the university was to elect two candidates to a list to be 
 submitted to the government, which would select therefrom a 
 Rector, Vice-Rector, and Secretary, who would serve three-year 
 terms. This progressive step was suppressed in 1943. 
 
 In 1946, Rector Juan Oropeza named a committee of outstanding 
 university men to draft a law which would permit the autonomous 
 operation of the universities. They drafted the Organic University 
 Statute, which went far to restore autonomy, and it was promulgated 
 the same year. Despite the fact that the government retained the 
 right to name the three top authorities— Rector, Vice-Rector, and 
 Secretary— this legal instrument marked a definite step forward. 
 
 University autonomy persisted, under these conditions, after the 
 coup d'etat of 1948 that overthrew the government of President 
 Romulo Gallegos, which was replaced by the military junta of 
 Carlos Delgado Chalbaud, Marcos Perez Jimenez, and Luis Felipe 
 Llovera Paez. When Delgado Chalbaud was assassinated, he was 
 replaced by Dr. German Suarez Flamerich, and, in the absence of 
 Delgado Chalbaud's moderating influence, repression was intensi- 
 fied. In this oppressive atmosphere, the universities continued to 
 operate as islands of freedom, being able to retain professors con- 
 sidered enemies of the government because of the stability guaran- 
 teed by the Statute. The student bodies reacted antagonistically to 
 the government policy, giving rise to a climate of internal tension 
 which affected instruction in the universities and at times spilled 
 over beyond the cloister walls into street disturbances. 
 
 Because of the situation thus created, the Rector of Central 
 
EDUCATION 53 
 
 University, Dr. Julio de Armas; the Vice-Rector, Dr. Ismael Puerta 
 Flores, and the Secretary, Dr. Hector Hernandez Carabano, were 
 forced to resign. The appointment of their replacements, brought 
 in from the University of Merida, in September, 1951, unleashed 
 a wave of student protest that was used as the pretext for outright 
 suppression of autonomy and intervention of the University, and 
 on October 17 a decree was issued naming a Reform Council. Still 
 graver repercussions then occurred; the suppression of autonomy 
 was followed by the expulsion, imprisonment, and exile of pro- 
 fessors and students who fought the measure. 
 
 These events made it extremely difficult to continue the Uni- 
 versity in operation, but this finally was achieved and it functioned 
 without academic independence during the subsequent government 
 of Perez Jimenez, still more tyrannical and severe. Agents of the 
 infamous National Security Police were "planted" among Uni- 
 versity personnel for direct spying on activities, and a rigid control 
 of University City was established. 
 
 The weak voices of protest raised on the campus were easily 
 silenced until November 21, 1957, when the famous student strike, 
 forerunner of the downfall of the dictatorship, was smashed with 
 extreme violence. 
 
 Dr. de Armas, the Minister of Education in the provisional 
 government headed by Wolfgang Larrazabal, named a University 
 Commission which was asked to draw up a new law embodying 
 autonomy and to operate Central University until the law was 
 enacted. This came about December 5, 1958, with the issuance of 
 a decree-law granting full autonomy to the nation's universities, 
 an autonomy which remains in effect to this day. 
 
 ///. Organization Structure of the Autonomous University 
 
 Our academic and administrative autonomy is broad and ample. 
 The universities are required to submit an accounting and an annual 
 report to Congress through the Ministry of Education and are 
 subject to control after the fact by the Comptroller General's office. 
 
 There are no restrictions of racial, political, religious, or eco- 
 nomic character to a position as a faculty member or as a member 
 of the student body. Faculty positions, by the provisions of the 
 law, must be won in competitive examinations. There is a high 
 level of stability within the faculty and its members may not be 
 removed except for causes specifically established by law, and then 
 
54 The Caribbean : Venezuelan Development 
 
 after a fair trial. There is complete freedom of teaching and of 
 research, and the University is open to all currents of universal 
 thought. It is inspired by the concept of democracy in government, 
 of social justice, and of respect for human rights. It has a respon- 
 sibility to assess the country's problems but without neglecting its 
 basic mission. 
 
 Seeking to provide equal opportunities for all in the field of 
 higher education, the law establishes that undergraduate studies 
 are free— an old and cherished Venezuelan tradition and one that 
 has permitted large numbers of students from lower economic 
 levels to complete their university training. The law also estab- 
 lishes that the national budget allocation for the country's uni- 
 versities is to be at least 1.5 per cent of the total government budg- 
 et, although the drafting Commission had sought to make this 
 figure 3 per cent in order to ensure a flourishing university de- 
 velopment program. The 1963 budget, now under discussion, pro- 
 vides for an allocation that amounts to 1.84 per cent of the total. 
 
 TABLE 1 
 GOVERNMENT SUPPORT OF NATIONAL UNIVERSITIES 
 
 
 
 
 
 Min. 
 
 
 
 
 
 
 
 Educa- 
 
 Govern- 
 
 1 as Per 
 
 
 Alloca- 
 
 Addi- 
 
 
 tion 
 
 ment 
 
 Cent of 
 
 Year 
 
 tions 
 
 tions 
 
 Total 
 
 Budget 
 
 Budget 
 
 5 
 
 
 (000 Bs.) 
 
 (000 Bs.) 
 
 (000 Bs.) 
 
 (000 Bs.) 
 
 (000 Bs.) 
 
 (000 Bs.) 
 
 
 1 
 
 2 
 
 3 
 
 4 
 
 5 
 
 6 
 
 1956-57 
 
 27,452 
 
 500 
 
 27,952 
 
 168,948 
 
 2,660,000 
 
 1.03 
 
 1957-58 
 
 29,704 
 
 11,291 
 
 40,995 
 
 178,341 
 
 2,800,000 
 
 1.06 
 
 1962 
 
 109,200 
 
 18,000* 
 
 127,200 
 
 579,150 
 
 5,942,000 
 
 1.84 
 
 ^Estimated additions due to shortages of funds. 
 
 The University Council is the highest university authority. It 
 is composed of the Rector, the Vice-Rector, the Secretary, the deans, 
 a representative of the Ministry of Education, an alumni repre- 
 sentative, and three student delegates elected by the student body. 
 
EDUCATION 55 
 
 The Rector is the presiding officer of the Council, the legal repre- 
 sentative of the University and, with the Vice-Rector and the 
 Secretary, is responsible for administrative and educational opera- 
 tions at their highest level. These three officials are elected to 
 four-year terms by the claustros, made up of the faculties, alumni 
 representatives, and one student for each forty enrolled. 
 
 In Venezuela, we use the Spanish word Facultad as the equiva- 
 lent for the term "school" as used in universities of many other 
 countries. The Facultades, which enjoy a considerable degree of 
 autonomy, are governed by their own councils and deans, who 
 are the presiding officers of the councils as well as executive 
 officers of the Facultades. The councils include, in addition to 
 the deans, seven professors, elected by their fellows; an alumni 
 representative, and two student delegates elected by the student 
 body. There is another body known as the "Assembly of the 
 Facultad," which consists of the professors, student representatives 
 equal to 25 per cent of the number of professors, and five alumni 
 representatives. These groups receive the semester report of the 
 Dean and decide questions of major import when they arise. The 
 Assembly also elects the Dean, for a term of three years. 
 
 Other bodies of great importance in the University are the 
 Council of Scientific and Humanistic Development, which has 
 charge of promoting, coordinating, and stimulating scientific re- 
 search in the University in much the same manner as is done by 
 National Research Councils in those countries which have such 
 agencies; and the Development Council, which seeks to increase 
 the University's income and to expand its property. 
 
 The University organization chart includes the Administration 
 Office, the Faculty Welfare Institute, the Student Welfare Organi- 
 zation, the Cultural Administration (cultural extension, informa- 
 tion, and public relations), the Central Library, the Development 
 Office, the Planning Office, the University Maintenance Office, 
 Sports Direction, and others. 
 
 The National University Council carries out the over-all coordi- 
 nation of university education in Venezuela. This body, presided 
 over by the Minister of Education, is made up of the Rector, one 
 Dean, and one student from each university, national or private. 
 It has important attributes including the approval of the estab- 
 lishment of new Facultades, schools, or institutes in the universi- 
 ties, on the fulfillment of certain requirements for their proper 
 operation. 
 
56 The Caribbean: Venezuelan Development 
 
 IV. University Expansion 
 
 It may be said that the new era which opened for Venezuela with 
 the overthrow of the dictatorship in 1958 has been characterized 
 chiefly by a spirit of rebirth and expansion of the country's educa- 
 tional activities. Many mistakes have been made in the dizzying 
 growth of our educational facilities; some of these mistakes have be- 
 come more apparent in the expansion process, and other new ones 
 have occurred because of the speed with which the country has 
 set out to build an educational system adequate for the masses of 
 our population. In spite of these admitted defects, the over-all 
 balance may be considered positive. 
 
 The autonomous universities have played an active and dynamic 
 part in the country's educational development. A brief look at 
 their individual growth gives a clear indication of the magnitude 
 of the expansion they have undergone. 
 
 The University of Carabobo, which had its start in a small School 
 of Law established by Central University in the city of Valencia, 
 now has 1,730 students. The University of Zulia in Maracaibo, 
 which had 630 students when the dictatorship fell, now has an 
 enrollment of 5,232. The University of Los Andes in Merida had 
 1,395 students in 1957 and this figure has now grown to 3,973. In 
 the same period, the enrollment at Central University has increased 
 from 5,486 to 17,300. The University of Oriente (East), which did 
 not exist in 1957, now has 919 students enrolled in regular academic 
 courses and 580 students taking technical courses. This means 
 that in five years' time total enrollment in the five government 
 universities has grown from 7,511 to 31,154. 
 
 To make adequate provision for this substantial growth, a deter- 
 mined effort has been made to organize courses, sections, schools, 
 institutes, and Facultades, in addition to creating new universities. 
 One of the greatest difficulties, logically, has been that of the avail- 
 ability of faculty members. Plans have been drafted for the train- 
 ing of this personnel, qualified people have been brought in from 
 abroad, and competent laymen in Venezuela have been persuaded 
 to take time from their regular occupations to help out. Un- 
 fortunately, the quality of instruction has not always been all 
 that could be desired, but special emphasis has been directed toward 
 correcting these shortcomings. All the universities have consider- 
 ably increased their library resources and their equipment. The 
 increases in budget allocations and construction have fallen short 
 
EDUCATION 57 
 
 of actual needs, even though the expansion of government invest- 
 ment has been substantial. 
 
 V. Central University 
 
 To illustrate the progress of greatest interest during this period, 
 let us consider the case of Central University (although it should 
 be borne in mind that in the other universities as well great strides 
 have been made toward improvement of the country's higher edu- 
 cation). 
 
 Before entering into the details of progress achieved at our 
 University, I would like to point out that during this whole process 
 we have been able to maintain in all its ramifications the spirit of 
 an open institution, free of discrimination of any kind, and with 
 the complete academic freedom which is the fundamental raison 
 d'etre of the autonomy principle. No professor has been fired be- 
 cause of his ideological position nor has anyone been refused a job 
 for such reasons, providing he meets the legal and technical 
 qualifications. 
 
 During recent years, the tension among political groups active 
 in Venezuela has increased markedly and several serious crises 
 have arisen. As normally happens, when social and political prob- 
 lems exist in the community, their repercussions extend, in lesser 
 or greater degree, to the university; this is particularly true with 
 respect to the student body which, in youthful ardor, takes part 
 in activities of a political nature that tend to affect the operation 
 and stability of the university. This circumstance has created prob- 
 lems for the government universities and has lessened somewhat 
 their effectiveness as educational institutions. And at Central Uni- 
 versity, there have been sporadic but serious incidents which have 
 threatened its very structure. The full maintenance of university 
 autonomy, together with the independence of the political criterion 
 of university authorities, has been particularly effective in dealing 
 with these situations. In addition, the respect toward all currents 
 of thought that prevails in the University has sharply limited the 
 possibility of political conflict among the members of the faculty. 
 
 When the dictatorship was overthrown, construction of the Uni- 
 versity City, which serves as Central University's seat, was well ad- 
 vanced. Begun during the presidency of Isaias Medina Angarita, 
 the project progressed rapidly during the dictatorship, which gave 
 high priority to public works construction in its over-all policies. 
 
58 The Caribbean : Venezuelan Development 
 
 In January, 1958, many of the buildings were not being fully uti- 
 lized, and there were some that had not been completed. Since 
 that date, in addition to a number of expansion projects, the 
 Odontology School and several athletic installations have been 
 completed. The building for the Pharmacy School has been com- 
 pleted from scratch. Outside University City, we have con- 
 structed the Basic Science building of a School of Medicine at- 
 tached to the Vargas Hospital, new facilities for the Schools of 
 Agronomy and Veterinary Medicine at Maracay, a Food Technology 
 Laboratory in Colinas de Bello Monte, and substantial progress 
 has been made on an Experimental Biology Laboratory. At present, 
 work is proceeding on the Chemical Engineering and Mechanics 
 and Electricity school buildings, the Facultad of Economics 
 building, and two buildings for the Facultad of Science. Existing 
 facilities are being fully used, and we face serious space problems 
 which must be solved in the near future. 
 
 The increase in Central University's activities is reflected in the 
 greater budget allocations made to it by the government. In 1957, 
 this allocation was Bs.17.5 million, and by 1962 the figure had 
 risen to Bs.71.6 million. During the last year of the dictatorship, 
 the University's revenues, which included matriculation fees paid 
 by students, were Bs.3.5 million. At present they are Bs.6.5 million, 
 not including the income from matriculation fees, which were 
 eliminated when free education was restored. 
 
 From the start of the University City project, an important area 
 of its grounds was earmarked for the construction of rental prop- 
 erties for the University. However, in spite of sustained pressure 
 by the University, this type of work has not prospered. Other 
 areas that had also been designated as the site of rental properties 
 for the University have not been handed over to it, and all this 
 has reduced the institution's source of income substantially. 
 
 Although budget allocations have increased substantially in re- 
 cent years, the rate of enrollment increase has been even greater. 
 Experience has shown that the amount of Bs.5,000 per student per 
 year is the requisite contribution needed from the government to 
 permit normal development of university activities. Table 2 shows 
 the evolution of this figure during the last decade. 
 
 The 1962-63 enrollment at Central University reflects a levelling 
 off in the rate of increase because of conditions affecting the middle 
 education field last year, chiefly student withdrawals. However, 
 all statistical evidence is that enrollment will continue to grow 
 
EDUCATION 59 
 
 during the next few years. All our facilities are now crowded with 
 students, and a change is being introduced into the enrollment 
 system; formerly open to all, it is now being made more selective, 
 with established enrollment quotas. This system has been applied 
 in the School of Medicine and has been approved for the different 
 engineering schools. Its application in the School of Agronomy is 
 under study. This decision was taken because it has become evi- 
 dent that enrollment scarcely can continue to grow without jeopard- 
 izing the quality of instruction. It is also hoped to raise the 
 calibre of students and thus increase the University's effectiveness. 
 
 TABLE 2 
 
 Cost per Year per Student 
 Year Bs. 
 
 1953-54 4,270 
 
 1954-55 4,493 
 
 1955-56 5,070 
 
 1956-57 4,398 
 
 1957-58 4,867 
 
 1958-59 4,605 
 
 1959-60 4,477 
 
 1960-61 4,805 
 
 1961-62 4,302 
 
 Advantage has been taken of the expansion process to apply in its 
 full force the basic policy established by the present administration 
 of creating a faculty whose members dedicate their full time to 
 their work as professors. In the past. Central University, like 
 the majority of Latin American universities, has been a training 
 ground for professors, presided over by professional men who 
 dedicate a few hours each week to the University. This condition 
 has been one of the principal reasons that have hampered the de- 
 velopment of a corpus of qualified instructors and of research. Long 
 hours of work are essential to orient and guide students and to 
 perform effective administrative-educational work. As one means 
 of promoting a full-time teaching career, the law provides for 
 
60 The Caribbean : Venezuelan Development 
 
 such professorships. These full-time positions require the same 
 number of hours (38 per week) as are worked by those dedicated 
 exclusively to teaching, but the law permits, subject to University 
 Council approval, that full-time professors may work outside the 
 University to a restricted extent. When the dictatorship fell, there 
 were approximately 100 full-time professors out of a total of 897 
 on Central University's faculty. In the 1961-62 academic year, this 
 number had risen to 650 out of a total of 1,889. Furthermore, a 
 large part of the School of Medicine faculty handling clinical in- 
 struction, who dedicated only a few hours a week to actual teaching, 
 were placed on half-time (20 hours a week). Table 3 shows the 
 breakdown in the amount of time given by faculty members to 
 their teaching. 
 
 TABLE 3 
 
 WORKING SCHEDULES OF CENTRAL UNIVERSITY FACULTY MEMBERS 
 
 1961-62 
 
 School 
 
 FuU-Time 
 
 Half-Time 
 
 Part-Time 
 
 Total 
 
 Agronomy 
 
 102 
 
 4 
 
 27 
 
 133 
 
 Architecture 
 
 15 
 
 16 
 
 101 
 
 132 
 
 Science 
 
 93 
 
 8 
 
 14 
 
 115 
 
 Law 
 
 21 
 
 16 
 
 99 
 
 136 
 
 Economics 
 
 58 
 
 14 
 
 186 
 
 258 
 
 Pharmacy 
 
 25 
 
 4 
 
 25 
 
 54 
 
 Humanities 
 
 95 
 
 45 
 
 57 
 
 197 
 
 Engineering 
 
 97 
 
 20 
 
 73 
 
 190 
 
 Medicine 
 
 97 
 
 373 
 
 80 
 
 550 
 
 Odontology 
 
 13 
 
 40 
 
 28 
 
 81 
 
 Veterinary Medicine 
 
 34 
 650 
 
 12 
 
 552 
 
 7 
 
 53 
 
 Total 
 
 697 
 
 1,899 
 
 The proportion of full-time personnel has been increased still 
 more during the current academic year, and many requests have 
 been received for additional changes; approval of these requests is 
 limited only by budget and space reasons. By the same token, the 
 number of professor-hours per student has increased considerably. 
 
EDUCATION 61 
 
 The University has contracted a large number of professors from 
 abroad, some of them of international fame. At present, there are 
 more than 100 of these men active at Central University, but the 
 establishment of differential exchange rates for the bolivar and 
 budgetary limitations have reduced the University's ability to uti- 
 lize this type of professor. On the other hand, steps have been 
 taken to train outstanding graduates for teaching and for research, 
 either through on-the-job training with established professors or 
 through sending them abroad. The Council for Scientific and 
 Humanistic Development offers scholarships for one, two, or three 
 years of specialized work abroad. Some 131 scholarship holders 
 have returned to Central University and are teaching full-time, 
 for the most part. There are now 76 others studying abroad under 
 such scholarships. One type of scholarship, available to men with 
 five years of teaching experience, makes possible refresher courses 
 in their particular fields. It has not been economically feasible to 
 establish the sabbatical year, but these scholarships go part way 
 toward supplying that deficit. Special courses in educational fields 
 also have been instituted for instructors who have shown develop- 
 ment aptitude. 
 
 As is the case in many small or underdeveloped countries, there 
 is practically no possibility in Venezuela for the movement of 
 teaching personnel from one university to another, which is of 
 great importance in career progress in the more advanced nations. 
 As a result, a relatively rigid system of promotion must accompany 
 the factor of stability if we are going to shape a professorial class 
 that is at once qualified and dedicated almost entirely to its role 
 as educators. The provisions of the current law call for a man to 
 start as an instructor, after having passed the competitive exam- 
 inations. A minimum of two years and an original work are re- 
 quired for the next step, that of assistant professor, at which point 
 he gains stability of employment. Then, intervals of four, four, 
 and five years, with special study in each case, are successively re- 
 quired for the positions of attached, associate, and full professor. 
 After four years, the full-time professor is designated first class and 
 after eight years, second class. Table 4 shows the comparative wage 
 scales for these professors and their counterparts in Columbia 
 University, as a typical United States university. 
 
 An effort has been made to balance the rigidity of the salary- 
 promotion structure and employment stability through flexibility 
 in rotation of occupancy of administrative-educational positions. 
 
62 The Caribbean : Venezuelan Development 
 
 The council of each Facultad, subject to approval by the University 
 Council, may designate course directors, department heads, and 
 directors of schools and institutes. The latter are named for three 
 years and may be reappointed. In a course involving a number 
 of professors, the position of director of a course need not be given 
 necessarily to the man with most seniority or highest rank in the 
 salary-promotion structure. 
 
 TABLE 4 
 
 
 Yearly ($) 
 
 Monthly ($) 
 
 Yearly (Bs.)* 
 
 Monthly (Bs.) 
 
 
 Central University: Full Time 
 
 
 Full professor 
 
 10,097 
 
 841 
 
 45,840 
 
 3,820 
 
 Associate 
 
 7,982 
 
 665 
 
 36,240 
 
 3,020 
 
 Attached 
 
 6,396 
 
 553 
 
 29,040 
 
 2,420 
 
 Assistant 
 
 4,810 
 
 401 
 
 21,840 
 
 1,820 
 
 Instructor 
 
 4,282 
 
 357 
 
 19,440 
 
 1,620 
 
 
 Central University: Full Time and Exclusive 
 
 
 Full professor 
 
 12,740 
 
 1,062 
 
 57,840 
 
 4,820 
 
 Associate 
 
 10,625 
 
 885 
 
 48,240 
 
 4,020 
 
 Attached 
 
 9,040 
 
 753 
 
 41,040 
 
 3,420 
 
 Assistant 
 
 7,454 
 
 621 
 
 33,840 
 
 2,820 
 
 Instructor 
 
 6,925 
 
 577 
 
 31,440 
 
 2,620 
 
 
 
 Columbia University 
 
 
 Full professor 
 
 12,500 
 
 1,042 
 
 56,750 
 
 4,729 
 
 Associate 
 
 8,000 
 
 667 
 
 36,320 
 
 3,027 
 
 Assistant 
 
 7,000 
 
 583 
 
 31,780 
 
 2,648 
 
 Instructor 
 
 5,500 
 
 458 
 
 24,070 
 
 2,081 
 
 *Exchange rate used: BS.4.54 to the dollar. 
 
 As a means of strengthening the social security of faculty mem- 
 bers, the Faculty Welfare Institute was set up, in consultation with 
 the Professors' Association. The Institute provides faculty mem- 
 bers with a Bs. 100,000 life insurance policy, with double indemnity 
 for accidental death, plus health insurance features. The full 
 
EDUCATION 
 
 63 
 
 cost of premiums for full-time and full-time and exclusive faculty 
 members is borne by the University, while half the cost is paid for 
 other faculty members. There is also a thrift plan which makes 
 short- and long-term loans to members; the latter type of loan, 
 whose maximum is Bs. 60,000, is now being used extensively for 
 home building. Faculty members contribute 5 per cent of their 
 salaries to the thrift fund and the University contributes half this 
 amount. The Welfare Institute has thrived and now possesses 
 substantial economic strength. Recently a pharmaceutical center 
 was established which provides faculty members with drugs and 
 medicines at reduced prices. 
 
 TABLE 5 
 CENTRAL UNIVERSITY EMPLOYEES-1962 
 
 Type of Personnel 
 
 Number 
 
 Per Cent 
 
 Administration 
 
 107 
 
 2.5 
 
 Teaching staff* 
 
 1,899 
 
 44.2 
 
 Auxiliary teaching staff 
 
 367 
 
 8.5 
 
 Office 
 
 692 
 
 16.1 
 
 Technical staff 
 
 328 
 
 7.6 
 
 Service staff 
 
 531 
 
 12.3 
 
 Personnel under contract 
 
 8 
 
 .2 
 
 Labor force 
 
 372 
 4,304 
 
 8.6 
 
 Total 
 
 100.0 
 
 *Includes those under contract. 
 
 A pension program is operated which provides pensions equal 
 to 75 per cent of the average salary for the last five years of service. 
 Faculty members may take retirement after 20 years of service, if 
 they have reached age 60, and after 25 years of service, regardless of 
 age. Pensions also are provided for faculty members who may 
 become incapacitated. 
 
 One of the principal objectives of the present University admin- 
 istration has been to guarantee equality of opportunity in higher 
 education. This is the reason for the re-establishment of free uni- 
 
64 The Caribbean : Venezuelan Development 
 
 versity education and for the great strengthening of student wel- 
 fare plans, in which Bs.4.6 million were invested in 1962. The 
 students pay Bs.75 per year to this fund, their only expense during 
 their university career, and payment may be waived if evidence 
 shows the student's inability to meet the obligation. For the 1962-63 
 academic year, student contributions to this fund totaled Bs. 1,246, 
 800. During the 1961-62 school year, all students who needed aid 
 and who met the requirements were given help; 522 scholarships 
 of Bs.200 monthly (for ten months) were granted, along with 260 
 dormitory scholarships and 350 meal scholarships. There is also 
 an assistance system for emergencies, medical and dental services, 
 a cut-rate bookstore, and low-cost dining rooms— a student can eat 
 satisfactorily on Bs.5 a day, and the dining rooms serve an average 
 of 1,800 meals daily. There are now some 1,000 students who live 
 in dormitories. When the dictatorship fell, there were only 130 stu- 
 dents living in dormitories, and the only scholarships in existence 
 consisted of waivers of the matriculation fee. 
 
 A number of factors have combined to increase the literary and 
 scientific output of the University, including the increase in full- 
 time and full-time and exclusive personnel, training of personnel, 
 contracting of researchers, opening new centers of study, the cre- 
 ation of the University Press and encouragement of literary work, 
 expansion of libraries and equipment, and the requirement of 
 original works for promotions. 
 
 The work of the Council of Scientific and Humanistic Develop- 
 ment has been of particular importance in this last respect. In 
 addition to its granting of scholarships mentioned earlier, it ad- 
 ministers funds for research and publication. It has an annual budg- 
 et of Bs.4 million, and has made 94 grants for research projects. 
 At present the demand for such grants exceeds the money available. 
 In some cases, the University makes contracts with governmental 
 agencies or with private firms for special projects, and it also re- 
 ceives donations for these purposes. This type of operation is in 
 its initial stage in Venezuela. 
 
 A number of textbooks have been published in recent years and 
 many others now are being prepared. 
 
 The Council for Postgraduate Studies was formed recently to 
 stimulate study programs for those who have obtained their first 
 university degree and wish to continue their studies. Such post- 
 graduate courses now are given in some Facultades, but the Council 
 hopes to be able to have them introduced into all, give them 
 
EDUCATION 65 
 
 greater uniformity, coordinate the programs, and standardize re- 
 quirements for degrees. 
 
 It has been proposed that the University eliminate the traditional 
 system of awarding the doctorate upon the presentation of a thesis, 
 as the only requirement for the degree after completion of regular 
 studies. Steps already have been taken in some Facultades to re- 
 quire study in advanced courses in such cases, which would give 
 the candidate a more solid grounding in his field. 
 
 Extension services have been actively operated both within and 
 outside the University, and some 18,000 persons have taken the 
 general interest courses offered in the last three years. These 
 services extend to different regions of the country as well as 
 Caracas. 
 
 The University, in addition, is the major center of cultural 
 dissemination in Venezuela through its own groups such as the 
 University Choral, the Estudiantina (a musical group), the Stu- 
 dent Chamber Orchestra, the Professional Chamber Orchestra, and 
 the Dance Group, and through outside organizations that are con- 
 tracted to give performances within the University. 
 
 Of profound concern to most universities is the effort to counter- 
 balance the restrictive nature of specialized studies through atten- 
 tion to integral development of the student's knowledge. Several 
 procedures have been adopted in the effort to widen the student's 
 cultural horizons throughout his years at the University. There is 
 a Commission of General Studies which has this as its goal. In 
 many of our schools, courses in humanities are required studies. 
 In the University's Cultural Office, there is a Department of Gen- 
 eral Studies which acts as the executive arm of the Commission of 
 General Studies. The Cultural Office also has organized on a 
 permanent basis activities designed to awaken the interest of stu- 
 dents in cultural affairs. 
 
 Special attention has been given by the University to athletics, 
 and its sports installations are of the first order. Instruction and 
 training are given in the different branches. University teams 
 occupy a high position in the athletic structure of the country and 
 frequently participate in international meets. An effort is made 
 also to interest the mass of the student body in these activities 
 through intramural sports events. In the school year 1961-62, the 
 University expended Bs.602,969 on its sports program. 
 
 A University Planning Office has been established which works 
 in cooperation with the Statistics Department, the Computing 
 
66 The Caribbean : Venezuelan Development 
 
 Section, and the Construction Planning Office. The University 
 Planning Office has done important work in the organization of 
 enrollment, analysis of student performance, mechanization of 
 study control, integration of the different levels of education, de- 
 sign of different study opportunities, and professional information. 
 A Planning Council is now being organized. It will organize 
 periodic seminars on planning and will provide guidelines to the 
 University in the directions it should follow if it is to fulfill its 
 objectives most effectively. 
 
 From what has been said, it is clear that the advent of demo- 
 cratic government and the institution of the principle of autonomy 
 have had a great impact on university education. Central Univer- 
 sity, the oldest and best developed institution of its type in the 
 country, has utilized to the maximum the benefits of autonomy 
 and has taken giant strides in converting an archaic organization 
 into a modern and efficient study center. Much remains to be done 
 in order to achieve satisfactory goals, but a solid foundation has 
 been laid on which to build and to progress toward those goals. 
 
Santiago Vera Izquierdo : the role of private 
 
 EDUCATION IN VENEZUELA 
 
 JLt IS NOT with the attitude of one who considers it his patriotic 
 duty to parade before his foreign friends only the most favorable 
 aspects of his country, its life, its culture, and its achievements that 
 I am here. Nor is it my intention to blame the present government 
 of Venezuela or its predecessors for any shortcomings I may dis- 
 close to you in the field of private education in Venezuela. On 
 the contrary, I shall try to present an objective view of the vital 
 question of the state of private education in Venezuela at the pres- 
 ent moment and the role it plays in national affairs. In order to 
 bring the present picture into focus, I must start out with a brief 
 survey of the history of education in Venezuela. 
 
 During the period of Venezuelan history known as "the Colony," 
 education was almost completely in the hands of the Church 
 through its missionaries, and although the Crown supported the 
 Church, as was customary of the epoch, the type of education 
 prevailing must be considered as private, if judged by modern 
 standards. The State had no control over educational institutions 
 and exercised no supervision over their educational activities. It 
 is important to bear this fact in mind in order to put in their 
 proper perspective later encroachments by the State on the preroga- 
 tives of private schools. 
 
 The first educational institution in Venezuela was founded in 
 
 67 
 
68 The Caribbean : Venezuelan Development 
 
 1516 by the Franciscan Order, and it provided instruction for 
 the Indians. Throughout the Colonial period, schools grew in 
 number as well as in the breadth and depth of the subjects taught. 
 The old Seminary of Santa Rosa in Caracas was granted the rank 
 of Royal and Pontifical University in 1725. 
 
 It has been said that the Spanish Crown did not foster education 
 in Latin America and that the ignorance of the Indians and 
 "Creoles" (children born in Venezuela of Spanish parents) mili- 
 tated in favor of the peninsular Spaniard. Yet, the University of 
 San Marcos de Lima, the oldest on the continent, and several other 
 universities in Latin America are true monuments to the sound 
 policy of a State which aided and promoted private education. 
 
 What was the level of education in Venezuela at the time, as 
 compared with that of the old world? It is difficult to make an 
 accurate estimate, but a few comments may provide some insight. 
 It is a well-known fact that the writings of Rousseau and the 
 Encyclopedists were studied and discussed in Caracas and other 
 cities of Venezuela, and this indicates that at least in some classes 
 a considerable degree of culture had been attained. A few years 
 ago, some manuscripts were unearthed in the basement of an old 
 building in Caracas which were found to contain music of the 
 highest order. The find came to be known in Venezuela as the 
 "Musical Wonder of the Colony." A group of musicians in Caracas 
 at the end of the eighteenth century had maintained close contact 
 with the old world and were clearly influenced by Haydn and other 
 Viennese masters. Don Andres Bello, the Latin American human- 
 ist par excellence, was born in Caracas, and his works in prose or 
 verse, of philosophy or philology, are considered among the classics 
 of the Spanish language. 
 
 Despite these and other instances which could be adduced, the 
 fact that the over-all level of culture was low in the Colony is un- 
 deniable. It remained very low even long after Venezuela gained 
 her independence. 
 
 // 
 
 A considerable advance was made by the historic decree of 1870 
 which established compulsory, free education in State schools so 
 that all Venezuelan children would receive at least an elementary 
 education. This latter objective, unfortunately, has not been 
 reached even up to the present. The combined efforts of State and 
 
EDUCATION 69 
 
 private education have not eradicated illiteracy, and there remain 
 more than one million illiterates in Venezuela (this figure is not 
 official), and more than two hundred thousand children of school 
 age who still are unable to attend school. That decree implies the 
 recognition on the part of the State of its obligation to provide 
 education for its citizens. It has, however, been construed as some- 
 thing entirely different; namely, as the right— rather, the exclusive 
 right— of the State to educate its youth which, to a free and inde- 
 pendent mind, is unacceptable. 
 
 Yet continuous misinterpretation of the decree has resulted in an 
 all-absorbing control of the State in matters pertaining to education, 
 and in 1947 a decree was issued which virtually abolished private 
 education in the country. This decree was not implemented and, 
 beginning in 1949, private education in Venezuela entered into a 
 period of continuous numerical growth of considerable importance. 
 In 1953, an important milestone was passed with the opening of two 
 private universities in Caracas. 
 
 An idea of the numerical importance of private education in our 
 country may be had from the following figures, taken from Balance 
 y Perspectivas de la Educacion en Venezuela, published by the Bul- 
 letin of the Office of Integral Planning for Education of the Minis- 
 try of Education in March of 1962 (see Table on page 70). 
 
 These figures undoubtedly are still at a low level, and continu- 
 ous efforts are being made to increase the total of students, teachers, 
 and institutions. Nevertheless, under Venezuela's present economic 
 conditions, the numbers should not be considered discouraging. 
 Nonofficial education supports itself mainly through fees paid by 
 students. There are also free private schools, supported by chari- 
 table organizations, and by some of the schools that charge fees, 
 which devote a good share of their income to that purpose. In a 
 country like Venezuela today, where practically every family has 
 felt the sting of economic pressure, the fact that 14 per cent of 
 the school population is able to find its way into private schools 
 instead of going into the free and well-housed official schools speaks 
 well for the efforts of the private educator. 
 
 Governmental financial aid to private education has been neg- 
 ligible so far, but there is reason to hope that the current rate, on 
 the order of one-fourth of one per cent of the total public education 
 budget, will be pushed to a significant figure in the near future. 
 
 I would like to reiterate my stress on the word "numerical" 
 when I spoke of the growth of private education since 1949. A 
 
70 The Caribbean : Venezuelan Development 
 
 growth in numbers has taken place, but the essential weakness of 
 private education in Venezuela in 1962 is the same as in 1947 or 
 1870. The State exerts such control over private schools in Vene- 
 zuela that it is not an exaggeration to say that private education 
 is merely tolerated; it has received neither the legislative nor moral 
 support and freedom it deserves, nor the financial aid it requires. 
 
 NUMERICAL COMPARISON OF OFFICIAL AND PRIVATE SCHOOLS 
 
 1961-62 
 
 
 - 
 
 Official Schools 
 
 Private Schools 
 
 Total 
 
 
 Number 
 
 Per Cent 
 
 Number 
 
 Per Cent 
 
 
 A. 
 
 Grammar Schools 
 
 
 
 
 
 
 
 Students 
 
 1,111,056 
 
 86.95 
 
 166,805 
 
 13.05 
 
 1,277,861 
 
 
 Professors 
 
 29,462 
 
 82.22 
 
 6,373 
 
 17.78 
 
 35,835 
 
 
 Institutions 
 
 11,066 
 
 92.03 
 
 958 
 
 7.97 
 
 12,024 
 
 B. 
 
 High Schools 
 
 
 
 
 
 
 
 Students 
 
 87,516 
 
 73.57 
 
 31,434 
 
 26.43 
 
 118,950 
 
 
 Professors 
 
 2,926 
 
 53.97 
 
 2,496 
 
 46.03 
 
 5,422 
 
 
 Institutions 
 
 141 
 
 37.80 
 
 232 
 
 62.20 
 
 373 
 
 C. 
 
 Technical Education 
 
 
 
 
 
 
 Students 
 
 48,910 
 
 96.01 
 
 2,030 
 
 3.99 
 
 50,940 
 
 
 Professors 
 
 2,231 
 
 89.49 
 
 262 
 
 10.51 
 
 2,493 
 
 
 Institutions 
 
 123 
 
 73.21 
 
 45 
 
 26.79 
 
 168 
 
 D, 
 
 , Normal Education 
 
 
 
 
 
 
 
 Students 
 
 17,923 
 
 54.83 
 
 4,764 
 
 45.17 
 
 22,687 
 
 
 Professors 
 
 747 
 
 36.74 
 
 1,286 
 
 63.26 
 
 2,033 
 
 
 Institutions 
 
 31 
 
 24.03 
 
 98 
 
 75.97 
 
 129 
 
 E. 
 
 University Education 
 
 
 
 
 
 
 Students 
 
 23,094 
 
 86.08 
 
 3,735 
 
 13.92 
 
 26,829 
 
 
 Professors 
 
 2,724 
 
 88.21 
 
 364 
 
 11.79 
 
 3,088 
 
 
 Institutions 
 
 5 
 
 71.43 
 
 2 
 
 28.57 
 
 7 
 
 F. 
 
 Pedagogic Institute! 
 
 
 
 
 
 
 
 Students 
 
 2,415 
 
 100.00 
 
 
 
 2,415 
 
 
 Professors 
 
 244 
 
 100.00 
 
 
 
 244 
 
 
 Institutions 
 
 Total 
 
 2 
 
 100.00 
 
 
 
 2 
 
 
 
 
 
 
 
 
 Students 
 
 1,290,914 
 
 85.51 
 
 218,768 
 
 14.49 
 
 1,509,682 
 
 
 Professors 
 
 38,334 
 
 78.05 
 
 10,781 
 
 27.95 
 
 49,115 
 
 
 Institutions 
 
 11,368 
 
 89.49 
 
 1,335 
 
 10.51 
 
 12,703 
 
EDUCATION 71 
 
 This control has been exerted in the past and is being exerted 
 now in a way that appears adorned with the best of intentions; 
 namely, the apparent duty of the State to supervise private educa- 
 tion in order to protect the public against unqualified teachers and 
 inadequate schools. Let me take a few minutes to review the way 
 in which this control is effected and the extent to which it affects 
 private education. First, however, I must refer to a condition, an 
 attitude, that, in my view, is more dangerous than the fact of con- 
 trol itself, that is, that in Venezuela State control over private 
 education is accepted as a matter of course by virtually everyone 
 except the private universities, which enjoy absolute freedom 
 and parity with the government universities. In the last general 
 assembly of the Federation of Catholic Parent-Teachers Associations 
 (FAPREC), a plea was made for freedom of teaching, but the stress 
 was placed on the otherwise sound thesis that the State must pro- 
 vide the means for the children of poor parents to attend schools 
 which derive their chief economic support from the government. 
 With the exception of the private universities, no serious, adequate 
 attempt has been made to challenge or reduce the effect of this 
 control. 
 
 /// 
 
 Beginning with the fourth grade, at the end of each academic 
 year, students are required to take examinations before a board of 
 three examiners appointed by the Minister of Education. In recent 
 years, private schools have been permitted to name the teacher of 
 the grade as an ex-officio member of the board. His opinion may 
 be voiced, but that of the three board members is usually decisive. 
 It is not the teacher who decides on the student's grade, but the 
 board. 
 
 In addition, the curriculum for each academic year is rigidly 
 established by official dictate, and except for a choice between 
 English and French as a foreign language, no opportunity is 
 afforded the private school to impart its own distinctive imprint to 
 its teaching. 
 
 The contents of individual subjects are established by the Minis- 
 try of Education. Official "programs" are prepared, and the teach- 
 ers must adhere to them. The programs list the authors to be read, 
 the paintings, sculpture, or architectural monuments to be ex- 
 amined, the thinkers to be studied, and so forth. 
 
72 The Caribbean: Venezuelan Development 
 
 The number of hours to be dedicated each week to each course, 
 and the length of classroom or laboratory sessions are also compul- 
 sory for all schools in the country. 
 
 All these details are subject to supervision, and the Ministry 
 sends inspectors to all schools from time to time to check up on 
 the manner in which the programs are being adhered to, down to 
 the most minute detail. 
 
 The work load imposed on students, especially at the high school 
 level, is so heavy that it is virtually impossible to carry out ad- 
 vanced studies of certain topics, to say nothing of introducing en- 
 tirely new courses or specialized fields of study. 
 
 I repeat that these conditions are unchallenged in Venezuela. 
 It is true that the State has a grave responsibility to protect 
 children and parents from the possible abuses of private schools, 
 but this protection ought to be carried out by means different from 
 those employed in Venezuela, which leave practically no initiative 
 to the private teacher. 
 
 A few years ago, a noted philologist who is a professor at Caracas' 
 Central University wrote a newspaper article in which he pointed 
 out serious deficiencies he had encountered in high school grad- 
 uates. The majority of private educators agree that teaching pro- 
 grams and methods must be changed, but they also point out that 
 they cannot attempt to do it in their own courses lest their students 
 fail in the final examinations. 
 
 In point of fact, the State-imposed controls have resulted in a 
 generally low standard of learning in practically all subjects, an 
 overloading of programs with details which obscure the funda- 
 mental elements of knowledge, and, in no few instances, in the 
 teaching of falsehoods and the use of improper methods. 
 
 This is particularly true with respect to mathematics. The 
 official programs have adopted the cyclic system, with geometry 
 placed at the end of the course. As the programs are so over- 
 loaded with detail that they cannot be covered completely, the 
 students go through five years of high school with practically no 
 fundamental knowledge of geometry. Given this, I once asked a 
 professor of solid and descriptive geometry in one of our uni- 
 versities how he explained the fact that students who were success- 
 ful in his course failed in the parallel course of elements of calculus. 
 He said the answer was simple. His students had had practically 
 no geometry in high school, so they had to learn it afresh with 
 the university course. This is a difficult, but not impossible, task. 
 
EDUCATION 73 
 
 On the other hand, the students o£ analytical mathematics have 
 to go through the process of first unlearning their high school 
 algebra, then relearning it the right way and, finally, proceeding 
 with their university work. This, coupled with regular assignments, 
 is indeed an overwhelming task. 
 
 I also know a man who teaches physics in the fifth year of high 
 school and in the first year of engineering in a university. He is 
 forced to teach the subject the official way in high school and 
 then, in his university course, straighten out the misconceptions 
 he himself taught. This he does so that, in his high school course, 
 he will be able to squeeze in a few sound concepts which will pass 
 unnoticed under the eyes of the official examiners. All private edu- 
 cators in Venezuela agree that, if State controls were removed, 
 there would be a number of private schools which would get the 
 right teachers to teach the right subjects the right way. This can- 
 not be accomplished under present conditions, and no way has 
 been found to present the case for private education in this light. 
 
 IV 
 
 But this is not the worst to be said against excessive State control 
 of private education. In my opinion, this detailed control implies 
 a disbelief in the effectiveness of education to prepare youth for 
 life and for the practice of citizenship. To educate is to provide 
 the means of arriving at a sound and independent analysis of life 
 in order to be able to formulate adequate solutions to the prob- 
 lems that life presents. To pretend that, in order to be educated, 
 a person must be conversant with details and more details which 
 serve only to dim the fundamental truths, is simply to confuse edu- 
 cation with information. The attention to detail so characteristic 
 of Venezuela State control over private education is, then, equiva- 
 lent to the confession that the State's educational aims are nothing 
 more than to inform its youth of certain things, and not to pre- 
 pare them for a fruitful and independent life. How can we ever 
 pretend that we are educating our youth for the exercise of freedom, 
 if the example before them is that of a teacher who himself is not 
 free in the practice of his profession? 
 
 It will be readily seen that no matter how concerned private 
 educators are about these problems, no matter how many well- 
 prepared teachers are willing to dedicate their lives to the most 
 noble of all human activities, all their efforts are doomed to fu- 
 tility under prevailing conditions. 
 
74 The Caribbean : Venezuelan Development 
 
 The role of private educators in Venezuela has been reduced 
 to that of a deck hand under the command of the State. It would 
 be misleading to speak of collaboration; private education merely 
 helps in what the State is doing, good or bad. Superhuman efforts 
 have been made by private educators and their students to over- 
 come these odds, and occasionally an outstanding figure appears 
 in the fields of letters and fine arts. But there is no doubt that 
 our products in these fields have no comparison with those from 
 our oil fields. 
 
 In view of the above, the goal of private education in Venezuela 
 must be to achieve a position of independence vis-a-vis the State. 
 Only in this way may we speak of real collaboration. An inde- 
 pendent group of private schools could offer healthy competition to 
 State education. What immediate step is to be taken? 
 
 I propose: TO EDUCATE. To educate, but this time not the 
 students, but their teachers and public men; to show them what 
 wonders have been achieved in other nations where the law limits 
 the power of the State and does not constitute a mere list of obli- 
 gations of the citizens; to show them that the necessary protection 
 of youth against quack teachers and educational sharpers can be 
 attained without hindering the work of accredited institutions; 
 to demonstrate that even if the relaxation of controls might result 
 in a temporary proliferation of bad teaching, time will bring about 
 a stratification of values, and the better ones will come to the 
 surface; to cite the example of the private universities which have 
 refused to be subject to ministerial control or supervision and 
 which are proud of the high human values of their alumni. 
 
 I would further propose to educate the government and legis- 
 lators so that they too may realize what is obvious from the point 
 of view of private education: that to ensure authentic teaching 
 freedom, private schools should be encouraged and supported, not 
 guided or controlled; and to place before them the important 
 financial fact that support of private education represents an actual 
 economy to the State. And finally, I would propose to educate the 
 public, the voting citizens, who may not be aware that the innocent 
 sounding words "supervision," "protection," or "technical guid- 
 ance" may be used— as in the past— as an ideal sheep's skin in which 
 to wrap the wolf. 
 
EDUCATION 75 
 
 Once the private schools regain their freedom, they could offer 
 the State collaboration and a loyal competition in the common task 
 of preparing future generations of Venezuelan citizens to face life 
 equipped with intellectual integrity and moral principles. After 
 a century and a half, the words of Simon Bolivar ring truer than 
 ever: "Morality and culture are our primary needs." 
 
Part III 
 
 PUBLIC SECTOR OF THE ECONOMY 
 
Alejandro Oropeza Castillo: the government 
 
 AND THE ECONOMY 
 
 JLn the course of contemporary history, Venezuela has been, 
 at various times, the object of world-wide attention. Before the 
 struggle for liberty, and in the midst of the colonial period, one of 
 the most advanced European thinkers. Baron Humboldt, observed 
 that political unrest and decisions of the greatest importance for 
 the destiny of America were the subject of conversation and the ac- 
 tivities most engaged in, in the two Latin American capitals: 
 Caracas and Havana. 
 
 Following history bore out this European genius' vision, Vene- 
 zuela achieved its political liberty in the period from 1810 to 1821. 
 Bolivar died in 1830 and left, as an inheritance, a possibility, a 
 doubt, and a question. Is military and political independence 
 enough to make a people free? Simon Bolivar, a young man who 
 died at 47, was possessed of a great truth. He knew that Vene- 
 zuelan independence lacked validity if not combined with Latin 
 American independence. He dedicated his years of glory to the 
 work of building "La Gran Colombia." He died when he had 
 hardly started to use his great creative capacity, and he died with 
 a pessimistic conviction— that his labor for political independence, 
 if it did not also achieve democratic stability and economic in- 
 dependence, was like a fruitless effort to plow the sea. 
 
 To complete the work begun by the Liberator is the permanent 
 challenge of Venezuelan history. One hundred years of anarchic 
 
 79 
 
80 The Caribbean : Venezuelan Development 
 
 caudillismo were to pass without freedom of will or continuous 
 order; one hundred years of barbarism; one hundred years of hope- 
 lessness; one hundred years of undermining and destroying the 
 work of the liberators. But beyond this irregular history, there 
 was an effort to meet the challenge and the meaning of the work 
 of the Liberator— in the writings of the frustrated intellectuals, in 
 the voices of the persecuted, in the verse of the rebellious poets, 
 and in the unquenchable hope of the masses. Venezuela is aware, 
 like Lazarus, that it must attain its just day of resurrection, since 
 in the effort to find it, it has buried splendid generations of its 
 people. 
 
 The establishment of democracy in Venezuela is not a simple 
 ideological exercise. It has been, and continues to be, the fulfill- 
 ment of an historic compromise, the realization of a political ideal; 
 but, above all, it is the consolidation and the presence in its history 
 of the essential being of the Venezuelan: Liberty. 
 
 Venezuela returns today, as in 1810, to the center of world-wide 
 interest, because here and now, as then, it is engaged in a battle 
 for freedom. This is a battle that is both more important and more 
 dangerous than the conflict of twenty years ago, according to a 
 leader of the Republican party, the present governor of New York, 
 when on July 12, 1960, he spoke to a group of young people. 
 
 The menace to peace, liberty, democracy, and human dignity, 
 that again we must fight in this hemisphere, is even more dangerous 
 than the one we faced twenty years ago, even though the world 
 is not actually at war. 
 
 Set in the northern part of South America, blessed by natural 
 resources that make it a nation with everything necessary to be 
 great and prosperous, that can assure its people a very high stand- 
 ard of living, Venezuela is a country of tradition, one whose na- 
 tionalistic aspirations never have sought to exclude its sister 
 republics from their rights of self-strengthening and development. 
 
 The interest of the world centers on Venezuela at the present 
 moment because our country, as we have already said, is engaged 
 in a decisive battle for freedom. In Venezuela, as in the rest of 
 Latin America, great economic, political, and social maladjust- 
 ments exist that have created structures difficult to change. En- 
 couraged by foreign investments in basic products for export, and 
 favored by political regimes that fit those structures, there have 
 come to be created in Venezuela, as in the other countries of Latin 
 
PUBLIC SECTOR OF THE ECONOMY 81 
 
 America, what we can call "elites of economic power," insistent, 
 with better organization and obvious effectiveness each day, on 
 conserving and increasing their control on economic activity and 
 concentrating wealth in the hands of the few. 
 
 Venezuela, in the play of political and economic forces of world- 
 wide concern, aside from being a country with its own national 
 characteristics, is day by day a crucial point where a universal di- 
 lemma is finding its solution. This dilemma is the following: a 
 community desires, yearns over its entire history to better its life. 
 And two diametrically opposed solutions are offered to it. One is 
 to sweep away its democratic representative system and substitute 
 a type of totalitarianism for it, doing away with the dignity of 
 man; and the other is responding to the needs of its masses, each 
 day more demanding, but maintaining the basic scheme of its 
 economic structure that is organized to offer, within the free enter- 
 prise system, a better distribution of wealth. 
 
 In Venezuela it is not a question of whether free enterprise 
 triumphs over statism, or vice versa. In Venezuela, the funda- 
 mental problem consists in arranging, consolidating, and bringing 
 into being a comprehensive, pragmatic, and intelligent formula, 
 by means of which the State and individuals, each in his own sphere 
 of activities, will play their roles in such a way that, instead of 
 getting in each other's way, they will serve to complement one 
 another. 
 
 We must say, with satisfaction, that apart from those elites of 
 economic power, there is today in Venezuela a dynamic manage- 
 ment group attuned to the march of history. It is a team of man- 
 agers of private capital, represented here at this Conference, blessed 
 with the sensitivity necessary to understand that economic produc- 
 tivity presents grave risks and creates a climate conducive to social 
 and political maladjustment, if the investment of high revenues is 
 not directed to achieving better social dividends. 
 
 // 
 
 It is not by way of historical digression, but rather by profound 
 conviction, that we wish to call your attention to an historic fact 
 of incalculable practical consequence. It concerns the role of the 
 State in the economy. At the end of the Industrial Revolution, and 
 during most of the nineteenth century, orthodox liberalism advised 
 the wisdom of, and fundamentally directed the policy of, laissez 
 
82 The Caribbean : Venezuelan Development 
 
 faire as the ideal formula by which all communities would achieve 
 the highest economic, political, social, and cultural level. 
 
 That policy, so obvious and so simple, came to govern the re- 
 lations of the so-called central countries (or developed countries) 
 with the peripheral countries (or underdeveloped); and became 
 the essential doctrine of the businessmen who provided capital for 
 the economic activity of these latter countries. 
 
 In the case of Latin American countries, however, the doctrine 
 of laissez faire came into conflict with a deep-rooted historic and 
 legal tradition. In fact, from the same time when the period of 
 conquest and colonialism began, with the application of the 
 principles of the "Legislacion de Indias," a peculiarity became 
 evident that was in time going to differentiate Spanish from English 
 colonialism. According to the laws of the "Metropoli," underground 
 riches (at that time gold and precious stones) were royal property 
 —that is to say, belonging to the State; and the king was able to 
 give in usufruct, or as concessions or under any other formula he 
 wished, the right of exploitation of the resources in question. 
 
 This legal institution of colonial times passed intact to the re- 
 public era and, at the present time, is what is behind the first 
 provision of the Law of Mines and Hydrocarbons, which establishes 
 the fact that anything having to do with hydrocarbons is funda- 
 mentally the property of the State and a matter of public interest. 
 
 For that reason, in studying the natural wealth of Venezuela, the 
 manner of producing and distributing it, and analyzing the rights 
 of private investment and the amount of its resources, we must 
 recognize a fact that we cannot ignore; the largest receiver of in- 
 come within the total economic grouping, is the State. Now then, 
 if the Venezuelan State receives the largest part of the income, it 
 must be inevitably the largest investor. If, by this economic de- 
 terminism, the Venezuelan State is the largest investor, we must 
 admit that what is valid and interesting is not just getting involved 
 in a polemic concerning the advantages and defects of free enter- 
 prise, but rather undertaking the task of defining with precision 
 the areas of complementary activity, and of proceeding in accord- 
 ance with the fundamental Law of the Republic which establishes 
 the liberty of industry and business, always under the principle 
 that the State does not try nor does it propose to compete with 
 private initiative. It rather seeks to stimulate it. 
 
 The Venezuelan State has already defined its economic policy 
 and has expressed clearly the need of forming a mixed economy 
 
PUBLIC SECTOR OF THE ECONOMY 83 
 
 in which the State management inspires and stimulates the de- 
 velopment and strengthening of the private sector. A clear defi- 
 nition of the objectives and the means used to achieve these things, 
 such as are contained in the Declaration of Economic Policy of 
 the National Government, a document that we shall shortly circu- 
 late in its English version, presents positive and stimulating factors 
 of economic development, and serves to be mutually beneficial to 
 the private and public sector of the economy. 
 
 /// 
 
 Venezuela is the theme of study, conversation, and discussion at 
 this Conference. At each of the meetings, and at all the different 
 occasions on which specific aspects of my country are analyzed, 
 there is always present the desire to know, to form an opinion, to 
 understand, even by a single expression or point of view, what is, 
 what we look for, and where we find Venezuela as a country, as a 
 nation, and as a people. 
 
 The truth is that we are not going to understand, much less to 
 judge Venezuela, if we submit it to an easy classification. The 
 Economic Commission for Latin America was aware of this situa- 
 tion when, in classifying the different countries of Latin America, 
 it set up three large divisions: coffee producing countries, Vene- 
 zuela, and other countries. 
 
 To study, analyze, and propose solutions concerning the eco- 
 nomic development of Venezuela, we must do so with a logical em- 
 phasis on its historic and economic individuality as a nation. 
 
 By our general and synthetic economic standard we can say that 
 Venezuela, over the last twenty-five years, has developed a fixed 
 gross investment that, from Bs.800 million in 1940, rose to Bs.3,300 
 million in 1950 and on to Bs.7,000 million in 1960. In the same 
 way, the most superficial analysis of the statistics available reveals 
 the strong growth of a country whose national income was Bs. 1,500 
 million in 1936 (Bs.800 per person per year); and reached Bs. 20,000 
 million in 1960 (Bs. 2,600 per person per year). This revenue, con- 
 sidered as distributed per Venezuelan, is the highest in Latin 
 America, and is even comparable arithmetically with the revenue of 
 such advanced countries as Canada, France, and Italy. The in- 
 equality is found in its social distribution, one of the indices of 
 which our able Minister of Agriculture will analyze— land owner- 
 ship. Still in Venezuela few have much and many have little. 
 
84 The Caribbean : Venezuelan Development 
 
 The petroleum industry assures the country of an annual in- 
 come in foreign exchange that, in the last four years, has averaged 
 approximately $1,400 million a year. This foreign exchange is due 
 solely to the petroleum business, and is not a function of the ex- 
 change market. The establishment of a control over such foreign 
 exchange, with all the favorable results to internal production, 
 does not affect but rather guarantees the economic function of our 
 monetary stability. 
 
 Parallel to these dynamic factors, and to place us within the geo- 
 economic map of the continent, we should note the potential of 
 our natural resources whose exploitation has already been boldly 
 begun, such as iron, the proved reserves of which currently are 
 more than 2,000 million tons, not including the vast areas not 
 measured or tested as yet. Oil reserves, which approximate 20,000 
 million barrels, with large territories neither explored nor de- 
 veloped, continue to be the basic resource and the essential product 
 for financing our economic development. With simple realism we 
 can cite the case of hydroelectric energy, the development of which 
 began with steel and aluminum production projects. Natural gas, 
 a wealth of incalculable dimensions, is capable, according to a 
 United Nations report, of developing the most economic and 
 powerful petrochemical industry in Latin America. Our natural 
 gas reserves amount to a 1,000 million cubic meters, and we are 
 guaranteed not only the possibility of petrochemical industriali- 
 zation, but liquefied gas, which offers a greater income than oil. 
 
 Concerning our attitude toward foreign investment, nearly 
 Bs. 25,000 million of the capital that presently exists in Venezuela 
 is from foreign sources. This investment, throughout all the po- 
 litical vicissitudes of the nation, has been respected and the in- 
 terests it represents have not been subject to violent or radical re- 
 prisal. Foreign capital enjoys the same treatment as capital en- 
 gendered in the country, and the tax on income in Venezuela is 
 more an incentive than an obstacle for development. 
 
 The productivity of foreign capital— fundamentally American— 
 in our country is the highest in Latin America according to a 
 recent study made by the United Nations. This study showed 
 that Venezuela paid, in interests and dividends, |800 million to 
 the foreign investor. This means that each Venezuelan paid more 
 than $100 in interests and dividends as opposed to $3.50 that, on the 
 same basis, each inhabitant of the rest of the Latin American 
 countries paid, taken all together. 
 
PUBLIC SECTOR OF THE ECONOMY 85 
 
 Venezuela's foreign credit has been one of its most notable assets, 
 and while other countries have defaulted on their debts occa- 
 sionally, or have got prolonged moratoriums, our country has never 
 done this; it being perfectly clear what has happened in the last 
 four years as a result of the chaos and dishonesty of the dictatorial 
 regime, and of a cyclical process begun by the happenings following 
 the closing of the Suez Canal in 1956. 
 
 It has already been proved by analysis and by unofficial statistics 
 that Venezuela has succeeded in raising the depressed curve of 
 that recession and that, day by day, economic indicators show an 
 ascending line of recuperation. 
 
 IV 
 
 This breath that has started to give life to the diverse sectors of 
 our economy does not take us by surprise. There exists a plan for 
 our economy, established realistically, for the period 1963-66 which 
 has been made known recently. There is foreseen a global invest- 
 ment of Bs.30,000 million in four years, and a growth of approxi- 
 mately 8 per cent interannually of our product, a rhythm that will 
 allow us to take care of the demands of economic growth and to 
 absorb the large number of workers, approximately 80 to 90,000 
 of whom are thrown each year on the labor market. This program 
 foresees, at the same time, the development in commercial quanti- 
 ties of Venezuelan steel. In 1966, a million tons of steel will be 
 produced, of which 300,000 tons will be flat products. As far as 
 the social aspect is concerned, the contribution of 240,000 homes and 
 the settling of 200,000 families in the rural sector is considered. 
 
 It is useful to observe that the development of a plan that tran- 
 scends the limits of the constitutional period of the present govern- 
 ment is a clear indication that we have been guided, not by po- 
 litical interest, but by a profound desire for public service, and it 
 is sufficiently clear that the welfare of the nation goes far beyond 
 the short life of the government in power. 
 
 In order to realize these plans, Venezuela counts on the resources 
 that give it its highest income; the income from petroleum is the 
 most dynamic and important factor in our growth. Pertoleum is, on 
 one side, the sector of the economy that makes the country virtually 
 a producer and exporter of a single basic resource; but it is, at the 
 same time, that which provides the country with the means neces- 
 sary to overcome that condition. 
 
86 The Caribbean : Venezuelan Development 
 
 This dynamic function of petroleum will be accentuated in the 
 present decade, until it passes the present production of 3 million 
 barrels daily, to reach a figure of 5 million towards 1970. The 
 growth in production will be accompanied by nearly triple the 
 amount of the present proved reserves, which, it is calculated, will 
 reach the figure of 50,000 million barrels. 
 
 Petroleum, then, offers us a broad perspective of resources for 
 development; and time, in limiting these resources to us, forces 
 on us the realization of a work that we must do, that is being done, 
 vastly and intensely in this decade, described in the message of 
 President Kennedy at Punta del Este as the decisive decade for 
 the economic, social, and political destiny of Latin America, and, 
 consequently, of the hemisphere in its totality. 
 
 Outside financial resources will play an important part and 
 should serve to complement our national capital. We shall have no 
 recourse to welfare or "aid" but rather to capital that will push 
 ahead the development of an economy that will repay with high 
 dividends. 
 
 The political policy of Venezuela, taking into account the emi- 
 nently international condition of the petroleum industry, is oriented 
 to the defense of markets and to the recuperation of prices, with the 
 purpose of working against the decline that these have experienced 
 in the face of the increase in prices of manufactured goods which 
 we import. As far as the internal development of the industry is 
 concerned, that policy is definite in making clear that it does not 
 contemplate the nationalization of the private petroleum industry, 
 but desires to stimulate it to continue the development of its present 
 concessions and to adapt itself to the new formulas substituted for 
 the colonial system of concessions. 
 
 Confronted with economic conditions that are extremely favor- 
 able for the investment of capital in the development of domestic 
 production in Venezuela, it is customary to offer arguments of ap- 
 parent solidity that, on being analyzed in the realistic light of 
 historical, political, and economic criteria, collapse with no base 
 whatsoever. It is customary to condemn with such adjectives as 
 "socialistic" certain means of State intervention, appropriate to 
 an underdeveloped economy that is attempting to give momentum 
 to its own growth. Means of protection against the acquisition of 
 foreign products on the part of the public administration are cur- 
 rent in the United States, just as is the action of the State in impos- 
 ing taxes, and in the spheres of social investment such as education, 
 
PUBLIC SECTOR OF THE ECONOMY 87 
 
 medicine, and housing. The United States has adopted regulatory 
 measures in these fields, and it is not logical for it to accuse an 
 allied country of trying out socialist doctrines alien to its historic 
 personality. Even less can we describe as the result of exotic 
 doctrine, the struggle of a century and a half that Latin American 
 nations have undertaken for the purpose of achieving a better 
 life. 
 
 The great rural population and the urban masses of Latin 
 America are not versed in the academic complexities of Marxism 
 and Leninism, but they know by their own experience that they 
 don't always eat when they wish, but when they can; 
 they are truly aware of their privations, confronted as they 
 are by the appalling spectacle of those elites of economic power 
 who eat what they want when they want to. The desire for 
 equality of opportunity and for fair distribution that rises up in 
 those masses, as a consequence of that awareness, must not be seen 
 as the late hour indoctrination of leaders that international com- 
 munism has brought in, recruited from the intellectual spheres of 
 the continental middle and petty bourgeoisie. At bottom, all this 
 nonconformism, rebellion, and hope represents is the old and ever 
 frustrated aspiration of a continent which hopes that its political 
 independence will be matched by economic independence. 
 
 As a result of all this, what is important in the present crossroads 
 of history where Venezuela finds itself today is a group sincerely 
 interested in discovering the truth, such as the University of Florida 
 has gathered together here, to discuss freely and openly, Venezuela 
 as a case history in development. 
 
 In my position as a representative of the government of Vene- 
 zuela, it is my pleasure to invite all of you, who are expressing 
 with your presence an interest in my country, to consider, evaluate, 
 and analyze the following points, briefly expressed: 
 
 1. There is taking place in Venezuela, a democratic experiment 
 that, having been confronted with the greatest difficulties and 
 threats to its existence, is working victoriously towards the cul- 
 mination of an institutional period that will change the meaning 
 of the political history of Venezuela. 
 
 2. In the negative desire to terminate that experiment and to 
 reinstitute a tyrannical regime, forces of the extreme left have 
 
88 The Caribbean : Venezuelan Development 
 
 united with elements of the regime deposed on the 23d of January. 
 The isolated actions of one or another of these groups have not 
 succeeded in turning us from our course, nor in weakening the 
 solidity of our democratic government, which reflects the deep po- 
 litical maturity of the Venezuelan people. 
 
 3. Any objective analysis of the national economy finds that the 
 basic, fundamental fact is that the Venezuelan State receives the 
 largest share of the income and becomes, on the strength of that, 
 the principal internal investor in our economy. Accordingly, the 
 Venezuelan State is obligated, beyond any doctrinaire position, to 
 be necessarily an interventionist. Now then, it is a clear and 
 obvious fact, in the official declaration of economic policy of the 
 national government, that private initiative in Venezuela has a 
 very important role in development, and that the function of the 
 State in touching the economic sphere is to invigorate the private 
 sector with ambitious programs of economic development, without 
 being heedless of the social impact which this policy has. The 
 national constitution itself, in establishing the freedom of industry 
 and business as one of its fundamental principles, defines without 
 room for doubt the situation of Venezuela as a country in the 
 process of development within the capital system and the market 
 economy. 
 
 4. Given the previous considerations, it is quite evident that in 
 Venezuela, as in the rest of Latin America, an extraordinary effort 
 is required, as much to improve the levels of economic productivity 
 in conjunction with this effort, as to achieve a better distribution 
 of wealth. 
 
 5. In this sense, it is useful to emphasize the message expressed 
 categorically by President Kennedy— the need of a vast, collective 
 effort that Latin America may overcome its present state of under- 
 development, and achieve the old ideals of the continent, brought 
 into being today by the ideological and political conflict of cul- 
 tures and opposing systems. 
 
 Lastly, I want to ask you and public opinion in general to con- 
 sider and evaluate the effort of a generation that has succeeded, 
 against contrary forces, in breaking the irregularity of its country's 
 history; in offering all its citizens the opportunity to express their 
 ideas, to organize themselves to achieve their material, spiritual, 
 and group interests; and, finally, in giving them the opportunity 
 to feel themselves active individuals of a history that previously 
 raised dictators on the shoulders of the entire nation. 
 
 When a country has been born as ours has, and has succeeded in 
 a gallant struggle in placing itself among the free nations of the 
 
PUBLIC SECTOR OF THE ECONOMY 89 
 
 world and when one is able, with legitimate pride, to speak of 
 Simon Bolivar as a son of the same native soil, he can well call 
 himself a friend of other peoples without implying subordination 
 or colonial complexes. We are identified with the democratic 
 system and we are joined in the same struggle on the side of this 
 great country of the North. But neither that circumstance, nor 
 this identity, makes us lose sight of the drama of ourselves as a 
 nation; that we are the responsible directors of our economic and 
 political destiny and that, above and beyond any circumstance, we 
 have met the challenge of our liberators: that of forging economic 
 independence, of consolidating the political independence that 
 they achieved for us. 
 
 I conclude by expressing the trust of the government I represent 
 in the solidarity of Venezuelan and United States relations, as two 
 nations that understand and unite with one another in a common 
 ideal: that both our peoples are determined to be free and to 
 maintain, each one, the privileges of this liberty. 
 
Benito Raul Losada: Venezuelan tax and 
 
 FISCAL POLICIES 
 
 XN order to establish clearly and precisely the general 
 lines of Venezuela's tax and fiscal policies, it is advisable to make 
 a brief summary of the conditions of growth and structure of the 
 country's economy, as well as of the evolution of its fiscal proce- 
 dures during recent years. 
 
 Consequently, this paper will comprise three parts. The first will 
 contain a brief description of the growth and structure of the coun- 
 try's economy. The second will describe the development followed 
 by fiscal policies and tax measures since 1958, and the third will 
 set forth, on the basis of the elements described in the first two, 
 current aspects of fiscal policy. 
 
 /. Growth and Structure of Venezuela's Economy 
 
 The Gross National Product (GNP) of Venezuela in 1961 was 
 Bs. 26,985 million, the highest in the nation's history, and national 
 income stood at Bs. 19,668 million.* 
 
 In 1950 the GNP was Bs. 11,826 million, and national income was 
 Bs.8,607 million. In the decade from 1950 through 1959, the annual 
 average population growth rate was 3.5 per cent, while the annual 
 average increase in income was 8 per cent, so that there was an in- 
 crease in per capita income. Disposable per capita income in 1950 
 was Bs.1,350. By 1959 this figure had risen to Bs.2,133. On the basis 
 
 *The fixed parity of the bolivar as established by the International Monetary 
 Fund is Bs.3.35 to $1. 
 
 90 
 
PUBLIC SECTOR OF THE ECONOMY 91 
 
 of these figures Venezuela might be classified as a country of mod- 
 erate economic development. However, the unequal distribution 
 of income (in spite of a trend in recent years toward a greater 
 sharing by labor) reflects clear characteristics of underdevelopment, 
 particularly since the income is concentrated in the north-central 
 part of the country, which contributes to a regional imbalance in 
 development. This condition of imbalance is further emphasized, 
 with respect to sources of income, by the fact that the industrial 
 sector occupies a distinct minority position in the alignment of 
 the country's basic economic activities. 
 
 Another striking characteristic of Venezuela's economy is its 
 extreme dependence on foreign economic factors: approximately 
 30 per cent of the GNP comes from exports, with oil and iron 
 ore accounting for 95 per cent of this amount, while imports of 
 goods and services utilize about 20 per cent of the GNP. 
 
 The position of the public sector has particular significance in 
 the structure and development of the economy. The government is 
 the principal recipient of income from the oil industry (in 1961, 
 industry payments to the government constituted 45.8 per cent 
 of total fiscal revenues) and public expenditures represent about 
 30 per cent of national income. 
 
 The growth experienced by the economy from 1950 through 
 1957 was due primarily to stimulus from foreign factors, including 
 the value of exports, an improvement in the terms of trade and 
 in the cost of servicing capital, and a net inflow of capital. Un- 
 fortunately, full advantage was not taken until 1957 of these 
 positive external factors which led to the expansion noted and to 
 a greater ability to import goods; this fact, coupled with, among 
 other factors, the lack of an economic policy designed to achieve 
 lasting development, led to the adoption of standards of demand 
 and supply prejudicial to sound economic growth. As a result, the 
 subsequent weakening of external factors that had stimulated the 
 economy necessarily brought about a deterioration and general 
 disruption of the economy, which, in turn, has been reflected in 
 the slowing down of the GNP growth rate in recent years. 
 
 II. Evolution oj Fiscal Policy in Recent Years 
 
 When the Perez Jimenez dictatorship was overthrown in January, 
 1958, Venezuelan public finances were in a heavily encumbered 
 situation, due to accumulated obligations. Although Treasury 
 
92 The Caribbean : Venezuelan Development 
 
 reserves at January 23, the date of the revolution, totaled Bs.2,215 
 million, they were chiefly the product of nonrecurring income from 
 new oil concessions granted by the overthrown regime. "Against 
 this volume of reserves stood the reality of a budget that was lacking 
 in candor and of accumulated debts, some already overdue, that 
 involved very large sums," said the introduction to the 1958 
 Annual Report of the Ministry of Finance. "The previous govern- 
 ment had as its regular practice the preparation of a budget cover- 
 ing only a part of the State's expenditures, which was presented to 
 Congress for approval. Together with this budget, there was pre- 
 pared the so-called Extraordinary Budget or Plan which included 
 the remaining administrative expenditures and government invest- 
 ments, particularly those in public works. In this way, a consider- 
 able part of public expenditures was removed from the need for 
 Congressional approval and was left to the caprice of the Execu- 
 tive Branch, with reference both to the amount involved and to 
 the nature of the expenditures." 
 
 In addition, the dictatorship in its last few years incurred spend- 
 ing that exceeded income, and many projects which were completed 
 during the period, or begun then and finished by the provisional 
 government in 1958, were not financed normally; that is, they were 
 not paid for during the corresponding budget year but gave rise to 
 a very large debt that burdened subsequent public finances. "In 
 this way," the Ministry of Finance reported, "the government obli- 
 gated future revenues for several years through debts contracted in 
 a disordered manner, with high carrying charges and excessive rates 
 of interest." 
 
 The provisional government in 1958 attempted to bring order 
 into this chaotic state of affairs by ascertaining the exact total of 
 the State's obligations, their due dates and the extent of overdue 
 payments. With an eye to the re-establishment of government 
 credit, it assumed responsibility for payment of obligations that 
 had fallen due prior to January 23 and for providing the money 
 to meet other obligations scheduled to fall due during the first 
 half of 1958. The Ministry of Finance report pointed out that to 
 carry out this program, additional credits were decreed in the 
 amount of Bs.1,314 million from January through June of that 
 year. 
 
 In addition to the demands mentioned above, the Treasury had 
 to respond to numerous requests from the provisional government 
 for substantial expenditures: administrative reorganization, pay 
 
PUBLIC SECTOR OF THE ECONOMY 93 
 
 increases for public employees, an emergency public works plan 
 to avert possible social conflicts from unemployment, the reopening 
 of industrial and agricultural lines of credit and sizable disburse- 
 ments for a livestock development plan, construction of schools to 
 meet the pressing educational needs of the country's youth, the im- 
 mediate equipping of hospitals and public health centers which 
 were in a condition of complete abandon, construction of sewer and 
 water systems, and, finally, assistance to state and municipal gov- 
 ernments to meet pressing obligations and to enable the under- 
 taking of public works projects that were urgently needed in the 
 interior of the country. Some of these many efforts fell short of 
 success because of the lack of advance planning, an adequate 
 financial policy, and the urgency with which they had to be carried 
 out. 
 
 When the time came to make budget estimates for the 1958-59 
 fiscal year, it was calculated that expenditures, swollen by accumu- 
 lated problems and by the need to meet obligations falling due, 
 would be Bs.5,818.4 million, as compared with ordinary revenues 
 of Bs.4,026.9 million. Although the government expected it would 
 have to resort to public credit to supply the deficit between income 
 and expenditures, the handling of the budget and an unforeseen 
 increase in revenues permitted the postponement of the loan which 
 had been proposed. 
 
 The introduction to the budget bill for the 1958-59 period set 
 forth the general lines of budget policy as follows: integrity in 
 drawing up estimates, strict fulfillment of administrative norms, 
 and prompt payment at due dates of obligations contracted by the 
 government. Concern was expressed, as well, of the need to avoid 
 inflationary dangers. 
 
 Of special importance was the modification of tax legislation con- 
 tained in two decrees of December 19, 1958, affecting the revenue 
 stamp and income tax laws. The chief modification in the first 
 of these laws was the elimination of the five-mill tax on gross sales 
 income, which meant a step forward because this tax suffered 
 numerous defects. 
 
 The principal change in the income tax law was an increase in 
 the progressive complementary tax rates, which were established 
 at 2 per cent on income up to Bs. 8,000 with progressive increases in 
 rates up to a maximum of 45 per cent on income of Bs.28 million 
 and above. The previous rate schedule had been from 1.5 to 28 
 per cent, respectively. It is important to note that the law's pro- 
 
94 The Caribbean : Venezuelan Development 
 
 visions include compensation for investments, the taxpayer en- 
 joying the right of a rebate of up to 25 per cent in the progressive 
 complementary tax in the case of investments for the acquisition of 
 fixed assets destined for use in the manufacture of industrial prod- 
 ucts, in the production of electric power, in transportation, or in 
 enterprises that will produce agricultural or livestock benefits. 
 
 In July, 1959, the budget of Bs.5,068.9 million went into effect. 
 In its presentation to Congress, the government explained that it 
 had been necessary to obtain public credit of Bs. 1,065.39 million 
 to cover the deficit anticipated for the fiscal year 1959-60. In April, 
 1960, the budget law was amended to permit the floating of a 
 foreign loan of Bs.667 million to finance certain public works 
 projects and for other clearly specified ends. This loan was nego- 
 tiated with several United States and Canadian banks. 
 
 During 1959, important protective measures were taken by the 
 government to meet the problem of underdevelopment, including 
 modification of tariffs, the waiving of import duties on some goods, 
 and the granting of import licenses. These measures have been 
 maintained and intensified by the present government. 
 
 Congress also approved two important modifications in fiscal 
 legislation in 1959, affecting liquor taxes and the laws governing 
 public credit. The public credit law, which went into effect August 
 12, 1959, establishes a logical system for extraordinary financing 
 operations that may be required by the government, either to solve 
 temporary cash shortages or to permit the execution of productive 
 projects; it also makes it more feasible for the authorities concerned 
 to attract private saving into productive investment and to manage 
 the money market in line with the country's current needs. The 
 new law on liquor taxes went into effect three days later, on 
 August 15, 1959. It is designed to fulfill important objectives in 
 both fiscal matters and the realm of social problems. 
 
 The year 1959 in general was highly difficult, with a financial 
 situation made dangerous by the inflationary factors inherent in 
 prevailing conditions which, coupled with the cumulative effect 
 of prior years, threatened to disrupt the economy seriously. The 
 deficit public spending policy that had been followed for a number 
 of years, the accumulation of short-term obligations, and an exces- 
 sive credit expansion had placed the country in a position of 
 spending more than was needed by a balanced development. 
 
 "In a country with freedom of imports and of exchange, the 
 effect of these expansionist factors was felt chiefly in the balance of 
 
PUBLIC SECTOR OF THE ECONOMY 95 
 
 payments and in the shrinking of Treasury reserves and, to a much 
 lesser extent, in the rise of prices," according to the introduction 
 of the 1959 Annual Report of the Ministry of Finance. 
 
 In addition to the budgetary problem, a critical foreign exchange 
 situation arose in 1959, with the loss of exchange attributed in part 
 to increased imports and to the persistent emigration of capital. 
 The factors leading to capital emigration operated freely because 
 monetary policy had created an excess of liquidity in the money 
 market. On the one hand, the fiscal deficit provided more cur- 
 rency than the treasury received in the form of taxes, and, on the 
 other, the banks, notwithstanding a decrease in deposits, maintained 
 a high level of loan placements through the use of cash reserves 
 and Central Bank discount facilities. The government openly and 
 categorically rejected devaluation of the bolivar as a solution of 
 the exchange problem. This left two alternatives: exchange con- 
 trols, or the application of a fiscal and credit policy which would 
 adjust the amount of currency in circulation to the real needs of 
 the country and which would cease contributing to the excessive 
 liquidity of the market. 
 
 It was decided not to institute exchange controls, and an adjust- 
 ment policy was adopted that was designed to eliminate the mone- 
 tary factors which had led to the excess of currency in circulation 
 and to the flight of capital, as well as to overcome the real and 
 psychological factors that kept the problem alive. To this end, 
 the Central Bank adopted a policy of balancing its rediscount 
 portfolio with the aim of preventing this facility from being used 
 to continue the increase of credit in an inflationary manner above 
 and beyond the normal resources of the banking system. To take 
 care of legitirnate needs of the manufacturing industry, the Vene- 
 zuelan Development Corporation, the government industry financ- 
 ing agency, drew on its cash reserves to effect bank discounts 
 for industry. From the end of 1959 and through 1960, fiscal policy 
 called for austerity in public expenditures, along with monetary 
 and credit restriction, in an effort to correct foreign and domestic 
 imbalances. But new difficulties arose with the increase of the fiscal 
 deficit, the intensification of capital flight, and the reduction of 
 liquidity, which led to a decrease in investment and in the general 
 level of economic activity. For these reasons and because of the 
 need to put a stop to capital flight, exchange controls were estab- 
 lished toward the end of 1960 and a policy was adopted that was 
 designed to lead to economic recovery and stabilization. 
 
96 The Caribbean : Venezuelan Development 
 
 The year 1961 included the second half of the 1960-61 fiscal year 
 and a six-month transition fiscal period, from July 1 to December 
 31. That year it was decided to shift Venezuela's fiscal year from 
 the former system that included six months of two calendar years 
 to make it coincide with a complete calendar year, and a special 
 budget was prepared for the six-month transition period. 
 
 A number of steps were taken during 1961 to modify Venezuela's 
 tax legislation further. Affected were the income tax, cigarette tax, 
 and stamp tax laws, the modifications of which were adopted in 
 February; accompanying these changes was the adoption in June 
 of a new law of emergency economic measures. 
 
 The most important changes effected were: placing of income 
 tax collection on a pay-as-you-go basis; an increase in cigarette taxes; 
 an exit tax for all persons traveling abroad. The emergency eco- 
 nomic law authorized the government to take measures to reduce 
 operating expenses of the public administration and to increase 
 tax revenues. The law authorized general salary cuts for all em- 
 ployees of the government, its dependencies, and enterprises in 
 which it holds 50 per cent or more of the stock. It also "froze" the 
 provisions of collective contracts between the government and its 
 employees and ordered the reorganization of the State's autonomous 
 institutes with an eye to increasing their efficiency. Increased tax 
 revenues were sought with changes in income tax rates, as well as in 
 inheritance, gift, and other tax rates. 
 
 The application of these changes during 1961, the increase of 
 credit capacity through bank rediscount, and the revival of the 
 construction industry through public works and expansion of mort- 
 gage credit brought about a relative improvement in the level of 
 economic activity, an increase in currency circulation, an increase 
 in bank credit, and some improvement in private bank deposits. 
 By the same token, the decrease in Treasury reserves was halted, 
 and the GNP growth was about 4.6 per cent. 
 
 The 1962 budget, the first one to coincide with the calendar year, 
 contained a number of changes that gave it greater uniformity. It 
 also contained a schedule of fixed charges and salaries of personnel. 
 In addition, the government drew up an operational and investment 
 program which systematized the broad field of activities carried out 
 by government agencies, detailing the goals of projects for which 
 appropriations were to be made and the cost of the programs out- 
 lined in the budget. 
 
 In April, 1962, the government modified the exchange control 
 
PUBLIC SECTOR OF THE ECONOMY 97 
 
 system in order to effect substantial savings in exchange available 
 and to secure equilibrium in the balance of payments. The list 
 of imports permitted at the official exchange rate of Bs.3.35 to $1 
 was drastically reduced, producing an increase in official revenues 
 from the exchange differential. 
 
 The proposed 1963 budget estimates that income and expendi- 
 tures will balance at Bs.6,225 million. It also discloses a pronounced 
 improvement in the fiscal situation, which will permit the budget 
 to be balanced, a development of profound significance for eco- 
 nomic stability. 
 
 The improvement in the fiscal situation and its expected con- 
 tinuation during 1963 stems from the increase in ordinary revenues, 
 collected and estimated, and from the measures taken by the gov- 
 ernment to cut down administrative expenses. The fiscal improve- 
 ment undoubtedly will be reflected by a corresponding improve- 
 ment in the country's general economic picture, especially in view 
 of the prospects of achieving a favorable balance of payments. 
 
 A comparison of expenditures during the 1956-57 fiscal year 
 (Bs.3,921 million) with those of the proposed 1963 budget (Bs.6,225 
 million) shows an increase of Bs.2,304 million, or 58 per cent. 
 However, as the budget draft bill points out, of this increase, "Bs.745 
 million are accounted for by the growth of educational and health- 
 welfare costs; Bs.503 million by increased allocations from the 
 federal government to state governments; Bs.668 million by pay- 
 ments on the public debt, and only Bs.338 million by the increase 
 in all other budget expenditures." 
 
 The budget bill draft envisions capital expenditures in the 
 amount of Bs. 1,768 million, equivalent to 28.4 per cent of the 
 estimated total. However, this does not indicate the true extent of 
 investments to be made in 1963, since others will be financed 
 through new loans authorized by special laws. Additional invest- 
 ments will be made by state governments, so that the total of capi- 
 tal expenditures for the year is expected to be Bs.2,764 million. 
 
 III. General Lines of Current Venezuelan Fiscal Policy 
 
 The preceding statements disclose that many and varied problems 
 have affected Venezuelan fiscal policy in recent years, and they also 
 bring into perspective the pressures exercised by complex political, 
 economic, and social factors on the decisions taken by the govern- 
 ment in financial questions. 
 
98 The Caribbean : Venezuelan Development 
 
 The general objectives of budget policy should be balanced eco- 
 nomic activity and price stability. However, in a country that is 
 clearly underdeveloped, fiscal policy must also be shaped so as to 
 create conditions essential to growth and to breaking the vicious 
 circle of poverty and underdevelopment which blocks economic 
 evolution. 
 
 The public sector is of such overriding importance in the Vene- 
 zuelan economy that it must be considered basic to the structure 
 as a whole, with its actions producing corresponding effects. Con- 
 sequently, any realistic analysis of Venezuela's economy must re- 
 gard a certain degree of state intervention as inevitable, a fact 
 which heightens considerably the responsibility of those who es- 
 tablish and administer fiscal policy. 
 
 As has been shown, general economic conditions of the past few 
 years have not been favorable to the growth of savings in the 
 public sector. The following circumstances have played an im- 
 portant part in this: the oil slump after 1957 meant a reduced 
 growth rate in official revenues from that industry; the large in- 
 crease in income during 1956 and 1957, the result of the granting 
 of new oil concessions in those years, led to increased operating 
 expenses, the establishment of subsidies, and created a condition of 
 excessive liquidity in the economy with adverse effects on the bal- 
 ance of payments; the tax structure was not sufficiently flexible to 
 obtain additional revenues from the nonoil sector; and because of 
 political and social factors and because of the urgent need for 
 stepping up the process of economic growth, public expenditures 
 in certain fields had to be maintained at high levels. 
 
 The current tax structure is based on three principal sources of 
 revenue: oil income, which is determined by international prices; 
 business transactions, determined by the volume of economic ac- 
 tivity; and internal consumption, determined by multiple factors, 
 among which distribution of income is perhaps the most important. 
 
 During recent years, the government has been obliged to increase 
 some taxes and to have recourse to foreign loans because of the 
 inadequacy of private and public capital formation. It should be 
 stated, however, that these tax increases have not raised appreciably 
 the rate of domestic taxation in Venezuela, which is still relatively 
 low (about 11 per cent in 1961). It should also be pointed out 
 that about 30 per cent of official revenues originates from resources 
 unrelated to taxes; that is, from the exploitation of public domain 
 and from fiscal monopolies. 
 
PUBLIC SECTOR OF THE ECONOMY 99 
 
 With the nature of the tax structure and the Venezuelan economy 
 in mind, the government has sought to direct its action toward a 
 policy of defense of oil prices; toward maintaining, as far as pos- 
 sible, stable price levels for basic consumer goods so as to avoid 
 inflationary tendencies; and toward securing a more equitable dis- 
 tribution of income at the same time that it establishes the bases 
 for balanced growth in line with population increase. 
 
 The need to modify the country's economic structure has chan- 
 neled public expenditures toward the basic goals of agrarian re- 
 form, industrialization, education, and health. 
 
 Toward this end, the government has made and will continue to 
 make, with its own resources and through foreign loans, very large 
 investments in farm colonies, rural housing, primary and secondary 
 roads, the steel and petrochemical industries, industrial credits, 
 schools, hospitals, hydroelectric plants, and other projects. Faced 
 with the need of raising the level of investment in the degree de- 
 manded by the country's economic development, and to help meet 
 these goals, Venezuela's fiscal policy has taken as its guidelines the 
 following general principles: 
 
 1. Utilization of existing resources to accelerate the development 
 of the economy and to promote its diversification. 
 
 2. Increased employment of the labor force and improved distri- 
 bution of income and wealth among the different economic sectors 
 and regions of the country. 
 
 3. Adequate coordination of monetary and fiscal policies in order 
 to defend and to strengthen the Venezuelan currency and to achieve 
 and maintain a favorable position of the balance of payments. 
 
 4. Intensified public investment through maximum use of avail- 
 able ordinary income, complemented with funds to be obtained 
 from credit operations both at home and abroad. However, all 
 public credits must be obtained with due regard to the nation's 
 capacity to repay them and must have favorable terms and bear 
 low interest rates. 
 
 5. Continued readjustment of administrative expenditures in or- 
 der to reduce them to the lowest possible levels that will still per- 
 mit the provision of good government services. This readjustment 
 should be conceived as an integral step of a general reform of the 
 public administration. 
 
 6. Stimulation of the existing policies of development and protec- 
 tion of agricultural and manufacturing activities through the pro- 
 vision of ample credit resources and the utilization of adequate 
 fiscal measures. 
 
100 The Caribbean: Venezuelan Development 
 
 7. Continued improvement of the methods used for the collection 
 and administration of taxes. 
 
 8. Prevention of inflationary pressure by the achievement of a 
 balanced budget and the implementation of a fiscal policy that will 
 tend to maintain monetary circulation within limits that will allow 
 an orderly growth of the economy while avoiding unjustified price 
 increases. 
 
 The results of a more rational fiscal policy are becoming visible 
 already. Besides other significant indications, we know now that 
 treasury reserves will be much higher this year-end than at the 
 close of 1961; that the public debt will remain within adequate 
 bounds and will also be lower than at the end of last year; and 
 that the payments position of the country is now practically bal- 
 anced. 
 
 Given these undeniable signs of recovery that began last year 
 and have continued in 1962, we can look forward with confident 
 optimism towards a positive development of the country which 
 will soon reach the pace necessary to attain one of its basic ob- 
 jectives: the achievement of its economic independence. 
 
Enrique Tejera Paris: the needs and the future 
 
 OF INDUSTRIAL AID 
 
 I. Population, Accomplishments, Industry Thrive 
 Under Democracy 
 
 Jb IVE YEARS AGO, the life expectancy of a Venezuelan at birth 
 was 59.6 years. Today it is 65.2 years, and we can state with 
 pride that while Venezuela still has the birth rate of a Latin Ameri- 
 can nation, it has a mortality rate that is at the European level. 
 Four years of democratic government have increased what Vene- 
 zuelans hold most dear: their span of life. In addition to this 
 substantial accomplishment, illiteracy has dropped substantially, 
 from 53 per cent at the fall of the dictatorship (in January, 1958) 
 to 20.3 per cent last year. 
 
 The highways of our democracy (5,400 kilometers, of which 
 3,340 are paved) would reach in a straight line from Boston to 
 San Francisco. 
 
 Some 23,300 new classrooms have been opened, providing school 
 facilities for more than 930,000 students; three new universities 
 have opened their doors, along with vocational high schools, tech- 
 nical schools, and a system for mass training of workers by the 
 government in cooperation with industry (the National Institute 
 for Educational Cooperation). 
 
 The volume of school construction is so great that it would equal 
 35 of our famous twin towers in the Centro Simon Bolivar in 
 
 101 
 
102 The Caribbean : Venezuelan Development 
 
 downtown Caracas/ and the volume of housing construction has 
 similar proportions. ^ 
 
 The oil industry contributes approximately 70 per cent of its 
 income to the national coffers, the state-owned Venezuelan Pe- 
 troleum Corporation is now a fact, and oil production is greater 
 than ever. Assistance to industry is at the highest rate in our 
 history, and the Gross National Product continues to climb, as 
 does the production of electric power, minerals, and agriculture. 
 
 Some one commented to me recently that two new factories are 
 being opened each week. In any event, the growth of our industrial 
 production, 11.8 per cent, is greater than that of Canada, India, 
 Germany, or the world rate, which is 2.1 per cent. Venezuela's rate 
 of increase is the highest in Latin America. 
 
 And on top of all this, Venezuela now has a government that ap- 
 pears to be more than stable, in fact indestructible; a government 
 elected by the people, a government that guarantees free elections, 
 that bases its conduct on ethical standards, whose leaders are in- 
 disputably honest. This government faithfully adheres to the law 
 and the pre-existing judicial system, in spite of all the pressures, 
 violence, and intrigue which are hatched against the democratic, 
 popular, responsible, elective, and representative system which the 
 people of Venezuela freely chose for themselves. 
 
 //. International Obstacles 
 
 This opportunity that the University of Florida has given us 
 should be utilized in a manner befitting a university— that is, in 
 the application of the dynamics of knowledge to the analysis of 
 present situations and in the suggestion of practical and immediate 
 solutions to the problems which today, as a result of human and 
 political congestion in our world, affect all people. 
 
 The figures I have just mentioned show, at least, the image of 
 a people engaged in a back-breaking struggle for its prosperity; and 
 and if this people has problems, there are others who would gladly 
 
 1. School construction totals 2,273,898 cubic meters, while the twin towers 
 have 130,154 cubic meters of construction, according to figures from the 
 Ministry of Public Works and the Centro Sim6n Bolivar's Planning Office. 
 From 1904 to 1958, 883 schools were built, while during three years of democratic 
 government, 2,205 schools were erected. 
 
 2. The Worker's Bank, the Rural Housing Division of the Ministry of Health 
 and Social Welfare, and state governments built 16,000 houses from 1959 through 
 1961. 
 
PUBLIC SECTOR OF THE ECONOMY 103 
 
 exchange their problems for these; if it has great needs, it also 
 has great natural and financial resources; if it has internal conflicts, 
 it also has favorable institutional factors of the first mark, such as 
 the undisputed support of the majority, a government in the hands 
 of representatives of that majority who are not cruel, nor rapacious, 
 nor extreme in word or deed; a foreign policy at once independent 
 and friendly, and finally, and no less important, armed forces which, 
 though Latin American, are daily giving proof of their political 
 neutrality, loyalty, and democratic self-sacrifice. 
 
 It is grievous to have to report, in continuing this analysis, that 
 a country like ours cannot today scale the peaks of progress— for 
 which it is perfectly equipped— without suffering the influence of 
 world political pressures whose strength lies in the continuation of 
 misery and whose defeat will be produced, paradoxically, when the 
 very objective these pressures proclaim is achieved: the welfare of 
 the working masses. Because this philosophy is a child of the 
 nineteenth century, it seeks, politically, the same kind of monopoly 
 which it so justifiably criticized and fought against in the econo- 
 mies of that century, and by the identical dialetic: the fear of 
 future development makes them prefer a present which they can 
 control, to a future of independence for all. 
 
 It is equally distressing to report that world economic conditions 
 are desperate and that, far from tending toward a swift equaliza- 
 tion, the situation of mankind is tending to become worse pre- 
 cisely in the areas where it already is in miserable condition. 
 
 Thus, although world food production has shown a 13 per cent 
 per capita increase since World War II, in Latin America it has 
 risen only 2 per cent, and in Africa it has dropped 2 per cent. And 
 world population is growing at the rate of 1.8 per cent annually, 
 while Venezuela's growth rate is 4 per cent. 
 
 This growing deficit theoretically would have little importance 
 if the underdeveloped countries exported more and obtained more 
 foreign exchange which they could use to purchase agricultural 
 surpluses from the developed countries. But while the latter's 
 exports of industrial goods continue to climb in value, in keeping 
 with the improved living standards of their workers, there is a 
 sustained downward pressure on the price of raw materials ex- 
 ported by the underdeveloped countries. This increasing dis- 
 parity between the price of what is exported and what is imported 
 has forced the underdeveloped countries to seek "abnormal" com- 
 pensation in the form of loans, give-aways, and assistance which, 
 
104 The Caribbean: Venezuelan Development 
 
 in the long run, cost the taxpayers of the developed countries a 
 great deal more and do not produce the obvious benefits left by 
 a normal flow of money. 
 
 Furthermore, if foreign exchange becomes increasingly difficult 
 to obtain, the underdeveloped countries will be forced to seek self- 
 sufficiency. Such a trend frequently leads to extremes, privileges, 
 corruption, high domestic prices, and lower quality of products. 
 Consequently, it is of more than passing interest that the share of 
 underdeveloped countries in world trade, which in 1947 was 38 
 per cent, dropped to 36 per cent in 1953, to 31 percent in 1956, and 
 to 29 per cent last year. 
 
 In further support of this thesis, it must be noted that the price 
 of industrial goods increased 24 per cent in the last decade while 
 that of raw materials dropped 5 per cent.^ This is the result of the 
 widely heralded "specialization" of the latter part of the nineteenth 
 and the early part of the twentieth centuries. United Nations 
 experts estimate that from price fluctuations alone, the raw material 
 exporting nations suffered a loss of from 9 to 12 per cent of their 
 annual income, or |2 billion in 1954 and 1958 when official in- 
 ternational donations from 1956 to 1959 were at the rate of |2,197 
 million per year.* 
 
 ///. Infrastructural Efforts Not Enough 
 
 To the study of international political and trade factors, which 
 we have touched on lightly by way of introduction, must be added 
 an analysis of Venezuela's own problems. These problems are so 
 urgent that they demand a treatment even more accelerated than 
 that which we are at present able to give them, even with our 
 relatively substantial resources. Venezuela's current situation con- 
 stitutes perhaps the best opportunity in the world today to make a 
 test case of the possible benefits of a well-thought-out technical and 
 financial aid program. But this does not mean that we should aban- 
 don a struggle which has scarcely begun, nor that we should con- 
 fuse the means with the ends. It is perhaps fitting to divide our 
 attention between the basic problems, which the Venezuelan people 
 are solving with infrastructure (social overhead capital) operations, 
 such as schools, hospitals, roads, and the problems of economic re- 
 
 3. Figures taken from "Las Economias de los Pai'ses Subdesarrollados," by J. 
 Starovnik, F. C. E. Gazette, Mexico, August, 1962. 
 
 4. Ibid. 
 
PUBLIC SECTOR OF THE ECONOMY 105 
 
 building, in which the cooperation of all sectors is urgently needed, 
 including that of friendly nations. 
 
 Thanks to an effective sanitary system, Venezuela has the lowest 
 infant mortality rate of Latin America (55.2 per thousand in 1960); 
 this, combined with the spectacular results of the elimination of 
 malaria, which was accomplished in the three years from 1945 to 
 1948, has led to a striking characteristic in our population— a very 
 great disparity between the children and youths who must be edu- 
 cated and the adults who have to bear the burden of this task. 
 This has resulted in a combination of an urgent and growing pres- 
 sure on employment, with the addition of 80,000 persons to the 
 work force each year; a lack of training of the work force because 
 of the abandonment in which it was left by the dictatorship; an 
 increased responsibility on parents, ill-equipped economically or 
 culturally to accept the new responsibility; and agitation by 
 desperate political parties that do not hesitate to resort to crime 
 for their ends and that are not guided by strictly national interests. 
 
 Against these almost cosmic factors, the present democratic gov- 
 ernment of Venezuela is struggling. It is not to be wondered at 
 that the worn-out political device of emphasis on the negative finds 
 a fertile field in an atmosphere that is upset by rumors, worries, 
 and discord. No matter how much has been done, attention always 
 may be called to what remains to be done, or to compare what 
 was done in ten years of dictatorship with what has been done in 
 three years of democracy, or to draw comparisons between the con- 
 centration of public works in the federal capital and the return to 
 a normal balance between the abandoned interior and the capital. 
 
 It was also to be expected that the change from a structure that 
 was essentially commercial and business in nature to an industrial- 
 ized structure could not be attempted without encountering prob- 
 lems. The following figures may give some idea of the progress 
 achieved by this development. In 1950, 51 per cent of everything 
 that was consumed in Venezuela was imported. In 1955, the figure 
 was still 44 per cent. This year, it has been reduced to 28 per 
 cent and it is continuing to go down in line with the highest rate 
 of industrialization in Latin America (11.8 per cent). As for our 
 Agrarian Reform, between 1948 and 1958, only 93,000 hectares of 
 land were distributed to 4,388 families. In contrast, in the three 
 years from 1959 to 1962, 61,000 families received 1.7 million hec- 
 tares, for which the former owners were paid. The goals established 
 in the National Plan, as revised for 1963, have been made on a 
 
1 06 The Caribbean : Venezuelan Development 
 
 conservative basis, but are no less impressive. In the 1963-66 period, 
 it is hoped to create 82,000 jobs, or 20,000 annually, while between 
 1950 and 1960, only 84,000 jobs were created, at the rate of only 
 7,600 per year. In other words, it is aimed to triple the accomplish- 
 ment of the fifties. 
 
 The annual growth of the industrial product is expected to be 
 13.4 per cent, as against 8.9 per cent in the 1955-60 period. Do- 
 mestic supply of manufactured products is scheduled to rise by 
 52.6 per cent in the years from 1962 to 1966, the value of manu- 
 facturing production by 60.2 per cent, and productivity per worker 
 by 32.2 per cent. 
 
 Venezuela has had since 1958 not only a planning office but also 
 a whole national system which provides for the coordination of 
 public and private executive organizations and which operates 
 today under the most advanced principles of methodology. 
 
 The Venezuelan government has contributed heavily to the 
 growth of private industry. Entire factories have been equipped or 
 re-equipped with government funds. Every new industry that opens 
 receives the protection it needs. There is money available to assist 
 private enterprises that need it and prospective industrialists can 
 choose between leasing their fixed assets in plants which the Vene- 
 zuelan Development Corporation will build for them, or seeking 
 loans on already existing plants. 
 
 During the 1958-62 period, the government has furnished almost 
 Bs.50O million in financial assistance to industry.^ In addition, 
 industry received other help in the waiver of some Bs.449 million 
 in customs duties in the 1958-60 period (as contrasted with Bs. 325.6 
 million from 1955 through 1957) and in the assignment of import 
 quotas. 
 
 5. Venezuelan Development Corporation long-term loans 
 Venezuelan Development Corporation short-term loans 
 Venezuelan Development Corporation special 
 
 promissory notes 
 Venezuelan Development Coiporation endorsements 
 Venezuelan Industrial Bank endorsements 
 
 Subtotal 
 Loans to small industry 
 Agricultural and Livestock Bank raw materials loans 
 
 Grand Total Bs.497.7 million 
 
 The loans to small industry alone generated 6,700 new jobs and benefited a 
 total of 14,300 employees and workers. 
 
 During the dictatorship, a period of ten years, only Bs.l06 million was 
 granted in long-term loans. 
 
 Bs.312 
 
 million 
 
 24 
 
 million 
 
 23 
 
 million 
 
 28 
 
 million 
 
 35 
 
 million 
 
 Bs.422 
 
 million 
 
 22.7 
 
 million 
 
 53 
 
 million 
 
PUBLIC SECTOR OF THE ECONOMY 
 
 107 
 
 In view of these figures, it is not surprising to note the progress 
 achieved in the substitution of imports and in the creation of jobs 
 and formation of capital. On the other hand, there is a sharp 
 disparity between the spectacular results in public works, education, 
 health, and other areas in the field of the infrastructure, and the 
 progress in the much more arduous and never-ending task of 
 transforming Venezuela's economic structure. And it is here, pre- 
 cisely, where we will find the making or the breaking of all our 
 efforts. At the rate at which we are now moving, we will soon 
 draw abreast of the developed countries in the traditional functions 
 and services of government. But the modern statesman, aware of the 
 problems of population, employment, and poverty, cannot continue 
 to view social overhead capital as the only end of government, no 
 matter how important such projects may be. They must be utilized 
 as a means for transforming the social structure and, additionally, 
 to sustain its progress at a rate of growth higher than that of popu- 
 lation. They must cover existing deficits and must continue beyond, 
 in order to gain precious time in the race against poverty, lack of 
 culture, and boredom. Or, as it was put brilliantly two centuries 
 ago, in the pursuit of happiness. 
 
 IV. Some Concrete Measures 
 
 Our foreign listeners may be surprised at the constant compari- 
 sons between the work of the dictatorship during ten years and that 
 of democracy in three years. It will probably seem absurd to them 
 that it is necessary to prove that the democratic system is a good 
 one! But they must know that in our country there is a minority 
 which loved tyranny for purely personal reasons. This minority, 
 together with an opposition that is also a minority and a very 
 noisy one, tries by all means to belittle or discredit the achievements 
 of democracy and to spread the worn-out myth of the efficiency 
 of a dictatorship. Against persons of this type there is little that 
 can be done because, although they listen, they do not heed. 
 Only persuasion and time can soften them. 
 
 There is also— and this is important— another group that loves 
 peace and order and correlates cause and effect with freedom and 
 disorder. This group is a respectable one because, although it is 
 not right, it has causes for concern. It might be compared to 
 the occupants of the family car going over a rough road, who feel 
 that if they could just get their hands on the steering wheel the 
 
108 The Caribbean : Venezuelan Development 
 
 ride would be a lot smoother. In Venezuela, many independents 
 try to get their hands on the wheel, and the bureaucracy is almost 
 totally made up of independents with long years of service. But 
 the country as a whole would like to live in greater peace than we 
 now enjoy. Who, being at war, does not desire peace? 
 
 In 1958, when it was left to me to serve as chairman of the 
 commission which created the national planning and coordination 
 system, I remember that we established as a fundamental objective 
 the strengthening of the principle of law and order, the speeding 
 up of the administration of justice, and the endowment of the 
 democratic order with greater strength. At that time of unprece- 
 dented unity and good feeling, we received some friendly criticism 
 for this pronouncement. But within a few years, when we have 
 successfully dominated and educated, through due process of law, 
 the rebels without cause who are now scourging the world, the 
 present government of Venezuela will stand out as one which had 
 the necessary courage to refuse to compromise with a dangerous 
 and seditious enemy, one which possessed the inner fortitude that 
 refused to permit it to take the easy solution of measures not 
 sanctioned by law. 
 
 I would like to indicate some paths we hope to follow in the 
 economic field, without attempting, naturally, to cover the entire 
 vast field of recommendations on economic policy. 
 
 In this connection, it may be stated that the Venezuelan govern- 
 ment is already employing to the maximum its direct resources 
 in the stimulation of private enterprise, and the time has arrived 
 when its action must be complemented by that of others if we are 
 not to fall into the morass of diminishing returns. I refer to the 
 stimulus that can be provided from the private sector— domestic 
 and foreign— through varying and flexible financial agencies which 
 would complement the work of the Venezuelan Development Cor- 
 poration and the Industrial Bank. Such agencies could float bonds 
 and acquire a broad base of small investors; they could rebuild 
 bankrupt businesses, get them back on their feet, and help to 
 revive the stagnant corners of our economy. This function can 
 be carried out only partially by the existing government agencies 
 such as the Worker's Bank, the National Agrarian Institute, the 
 Development Corporation, Community Development, and the 
 like, which encounter difficulties in collecting loans. The Develop- 
 ment Corporation, for example, with more than Bs.2 billion in 
 assets, has a great deal of trouble in collecting its loans. Why? It 
 
PUBLIC SECTOR OF THE ECONOMY 109 
 
 is not due to any lack of efficiency, but because, perhaps uncon- 
 sciously, some recipients of loans— big as well as small— have the 
 firmly fixed idea that the government is Santa Glaus. I am con- 
 vinced that mixed agencies, of government and private capital, 
 could make collections more effectively, and collections are the 
 foundation of credit. Venezuela has reached the point where it 
 could create agencies of the type of the National Financing Agency 
 of Mexico or the IRI of Italy, which contribute to strengthening 
 and stabilizing the stock market at the same time that they help 
 in building the economy. 
 
 If such an agency were created (and the Industrial Bank has a 
 proposal for one under study), the Development Corporation and 
 other government agencies could relinquish a part of their port- 
 folios, recover liquid funds and invest them in their programs to 
 develop the country's wealth. We would all like to see the Develop- 
 ment Corporation return to its original functions under the banner 
 of what has been aptly described by one of its present directors as 
 "the youthful spirit of 1946." 
 
 Another aspect worthy of mention is the development of adminis- 
 trative ability. This ability is not a monopoly of the private or the 
 public sector. In Venezuela, for example, there are well-operated 
 public enterprises and banks and there are private enterprises and 
 banks which are also well operated. And the contrary is also true 
 in both cases, of course. What happens in Venezuela today, in 
 point of fact, is that although it has a population of 8.4 million 
 (of whom only 30 per cent have reached the age of maturity), its 
 skilled workers, managers, doctors, and leaders are those of a 
 country of 3 million; and although the GNP in 1961 was Bs.26,881 
 million and its budget is Bs.6 billion, it must manage these re- 
 sources with the same limited skills and rapacity of 15 or 25 years 
 ago when we were very small and poor and certainly much less 
 developed than we are today. Consequently, we must accelerate 
 our training and our basic culture and must make full use of the 
 men that we have in the jobs they now fill, taking care that they 
 do not become worn out or bitter. 
 
 Finally, there is one last point, but one of primary importance, 
 which is the question of business and working capital. The doc- 
 trine of capital investment in productive activities has been 
 preached to satiety. But it can almost be said today that we have 
 more money to build factories than we need. Once these plants 
 have been built, we hear the other side of the story, almost as 
 
110 The Caribbean: Venezuelan Development 
 
 little known as the other side of the moon: the need for working 
 capital. I would like to put in a word here for our existing in- 
 dustries, those that we start up almost daily, which in the midst 
 of great trials and tribulations either have to pay tremendous in- 
 terest or close their doors. As if they were a new type of Midas, 
 everything they touch turns into fixed assets. 
 
 With respect to business, we cannot limit our understanding to 
 the fact that shut-downs occur among what is coldly referred to as 
 "submarginal" enterprises. No industry can exist without distri- 
 bution and it is better to use those already operating, reconstruct- 
 ing them, saving honest business men, than to try to create an- 
 other infrastructure, because we must bear in mind that, do what 
 we will and change what we will, we shall always be the same 8.4 
 million Venezuelans. Just as in the rest of Latin America, we need 
 salesmen and we need administrators. 
 
 To sum up, Latin America is a challenge to its own inhabitants 
 and not to its governments alone; this challenge is particularly 
 acute in Venezuela, a country which has never failed to excel. An 
 understanding policy of action, foresight, and freedom will resolve 
 all our problems, one by one. 
 
Eugenio Mendoza: the housing problem 
 
 Food, clothing, and housing are the three elemental 
 needs of man. From the spiritual standpoint housing is perhaps 
 the most important, for it constitutes the foundation of the home 
 wherein are preserved the moral standards of the family. Thus, 
 the stability of any society depends to a great extent upon its ca- 
 pacity to supply decent homes. The provision of an adequate diet 
 contributes indirectly to the solution of many other allied problems 
 closely associated with the home, such as education, health, and so- 
 cial behavior. It is clear that we must confront this impelling 
 challenge with energy and resolve. No quick and easy answer will 
 suffice; nor can we afford to be dissuaded by the tremendous ob- 
 stacles which must be overcome to solve the problem of providing 
 adequate housing for our people. 
 
 Vital as is the role of housing in the development of a society, it 
 must be viewed as part of a larger picture in order to arrive at a 
 feasible solution. In effect, each community enjoys only limited 
 productive resources with which it must satisfy many diverse needs. 
 Consequently, it must consider the relative urgency of each of these 
 needs in allocating its available resources. For this reason, it is 
 not practical to adopt the simple expedient of calculating the size 
 and growth of the population, the number of homes which that 
 population will require, and their total cost. This method, par- 
 ticularly in the case of the underdeveloped countries, would absorb 
 such a high proportion of their resources as to gravely endanger the 
 fulfillment of other needs just as vital. 
 
 All the Latin American nations are faced with an acute shortage 
 
 111 
 
112 The Caribbean : Venezuelan Development 
 
 of adequate housing. Not only have they been unable to stimulate 
 sufficiently housing construction and the installation of public 
 utilities in order to meet the new demand for housing resulting 
 from current population increases, but they have failed to reduce 
 the already critical shortages. Hence, the continued growth of the 
 "ranchos" (as our shanties are known) and of slums lacking in 
 even the most elemental services. 
 
 The population explosion underlies the urgency of adopting 
 drastic measures; otherwise, the housing shortage can only grow 
 progressively worse. Between 1951 and 1955 the population of 
 Latin America increased by 17 million inhabitants. Calculating an 
 average of 6^/^ to each family, it would have been necessary to con- 
 struct 2.7 million new dwellings during those four years, an average 
 of 675 thousand per annum. Nevertheless, it is estimated that 
 scarcely 100 thousand units were actually built each year, falling 
 far short of covering even the new requirements caused by popu- 
 lation growth. 
 
 In 1960 the deficit in Venezuela was estimated to be 780 thou- 
 sand housing units. Adding to this figure the requirements arising 
 from population expansion and deterioration of existing housing, 
 it is obvious that the situation is indeed grave. If we establish a 
 period of ten years in which to solve the housing problem in Vene- 
 zuela, it would be necessary to invest an average of |264 million 
 annually, more than |2.5 billion during those ten years. Arrayed 
 against these staggering requirements, we find that in all fields of 
 construction the combined activity of government and private en- 
 terprise barely reaches a figure of |88 million per annum. 
 
 During the past few years there has emerged in Venezuela a 
 growing awareness of the vital nature of the housing problem; 
 various solutions involving funds of the government as well as 
 private enterprise have been under consideration. 
 
 Undoubtedly, one of the most effective measures of the govern- 
 ment has been the creation of a savings and loan system in order 
 to encourage the formation of savings. This system, established 
 on the basis of the experience obtained by similar organizations in 
 the United States, has already commenced to function with a 
 capital of |20 million, contributed in equal parts by the Venezuelan 
 government and the Alliance for Progress. The future growth of 
 savings and loan institutions within this system should provide an 
 appropriate means of attracting savings in significant volume. 
 
 The recent formation of mortgage banks has begun to fill the 
 
PUBLIC SECTOR OF THE ECONOMY 113 
 
 vacuum in our investment market with respect to mortgage cer- 
 tificates with adequate guarantees, which will provide investment 
 opportunities for those funds until now directed into individual 
 mortgages in an unorganized market. In view of the fact that the 
 total of such mortgages in Venezuela amounts to more than 1 1,300 
 million, one can easily foresee the possibilities open to mortgage 
 banking in organizing a market which, through the placement of 
 mortgage certificates, could make available additional sums for the 
 execution of housing programs when our investors become accus- 
 tomed to this type of security. 
 
 The government has been pushing programs through its existing 
 institutions to the extent made possible by their financial alloca- 
 tions. Within the past five years the Banco Obrero has built 30,000 
 housing units located throughout Venezuela and this year they 
 plan to complete 5,000 more at a cost of approximately $24 million. 
 
 The Instituto de la Vivienda Rural, or Rural Housing Agency, 
 founded in 1958, has been conducting a successful program specially 
 adapted to rural areas. Up to the present time, this agency has 
 constructed 11,000 houses which have been offered under conditions 
 in conformance with the income prevalent among agricultural 
 workers. 
 
 Private enterprise has by no means remained aloof from the 
 national concern over the housing shortage. By means of the col- 
 lective contracts negotiated with their workers, part of the labor 
 benefits have been channeled into the construction of workers' 
 housing. This year the sugar cane industry will construct 1,000 new 
 homes under the terms of a new contract. 
 
 One of the most satisfying achievements undertaken by private 
 enterprise has been the creation of the Fundacion de la Vivienda 
 Popular, a nonprofit foundation dedicated to financing the con- 
 struction of housing for those classes in the greatest need. This 
 foundation has a capital of $2.86 million fully paid up and, in 
 addition, has received donations of land valued at more than $2.64 
 million. It has been granted domestic credits totaling $2.53 million 
 and $5 million from the Alliance for Progress. 
 
 With these funds, the foundation has undertaken the construction 
 of housing for laborers and members of the lower middle income 
 group. Two types of programs have been initiated. The first con- 
 templates the complete development of new communities furnished 
 with all the customary public services and utilities. Comfortable 
 houses are being offered at a cost of $3,000 to $5,000 each with a 
 
114 The Caribbean : Venezuelan Development 
 
 down payment of 25 per cent and the balance payable during the 
 next ten years. The second type is designed for workers of more 
 restricted means which will provide the answer to a gradual re- 
 placement of unhealthy slums with decent and sanitary dwellings. 
 These units consist of prefabricated houses costing between $1,500 
 and $1,700 each with a down payment of only 10 per cent required 
 and ten years to pay the remainder. 
 
 During 1963 the foundation plans to build 3,000 dwellings of 
 which 700 will be prefabricated houses, 200 will be apartments, and 
 the remainder will be houses in new real estate developments. 
 
 In order to facilitate the financing of its operations and to assure 
 steady progress in the execution of its plans, the foundation formed 
 the Banco Hipotecario de la Vivienda Popular subscribing to the 
 entire capital of $2,002 million fully paid in. This bank deals with 
 the general public in all fields of banking activity permitted under 
 the Venezuelan banking law, but it operates on the unusual princi- 
 ple of paying no dividends, as all profits are reinvested in housing 
 programs. 
 
 We have issued a total of $3.3 million in mortgage certificates, 
 and thus far our experience has been quite satisfactory. Oil com- 
 panies have acquired $2 million according to an agreement signed 
 with the government under which they have provided $27.5 million 
 and the government $16.5 million to help finance new housing. 
 This step has proved to be a strong stimulant to construction at- 
 tracting private investment of $48 million, resulting in the erection 
 of 7,000 homes. 
 
 The foundation has the capital, the experience, and the organiza- 
 tion to triple its programs. In order to assure the continuity of 
 those programs, the placement of mortgage certificates is essential. 
 As the market for these securities has not yet been sufficiently de- 
 veloped in my country, I consider it of the utmost importance to 
 establish an outlet for them here in the United States. 
 
 These certificates are exempt from Venezuelan income taxes and 
 potential investors in this country enjoy the safeguard of a United 
 States government guarantee of 75 per cent of the face value. There 
 is reason to believe that this percentage may soon be substantially 
 increased. 
 
 This provides a practical reply to many North American friends 
 who have so often asked me how private enterprise can collaborate 
 with the Alliance for Progress in advancing the development of 
 the Latin American nations. 
 
PUBLIC SECTOR OF THE ECONOMY 115 
 
 The accomplishments of the Fundacion de la Vivienda Popular 
 would not be as effective as they have been without the valuable 
 aid rendered by the Alliance for Progress in helping to finance our 
 programs. The Alliance is without doubt an important step for- 
 ward in the search for a solution to the many pressing problems of 
 Latin America, and it was well received from the outset. However, 
 there was a general impression that it would not be able to bring 
 to bear the force needed with sufficient urgency. It has been only 
 recently that we have begun to notice positive results and one feels 
 that the plan has begun to roll. 
 
 For ourselves it is a matter of satisfaction that the first credit re- 
 ceived by any private nonprofit institution from the Alliance was 
 granted to the Fundacion via the Development Loan Fund on March 
 15, 1961. The first group of houses was inaugurated in the city 
 of Valencia, demonstrating the advantages of close cooperation be- 
 tween private enterprise and the Alliance for Progress. 
 
 On the basis of our experience, we recommend that the Alliance 
 work more through private enterprise to insure the prompt and 
 effective use of funds. The Alliance has channeled much of its aid 
 and cooperation through government agencies. 
 
 I feel certain that the help of the Alliance in solving these ur- 
 gent social problems could be more effective if they would direct 
 a significant part of their resources to nonprofit organizations spon- 
 sored by private enterprise similar to the Fundacion de la Vivienda 
 Popular. 
 
 We further urge private enterprise of North America and of the 
 Latin American nations to take an active role in making available 
 their resources, knowledge, and experience in order to carry out a 
 vast housing program which has become such a vital factor in the 
 future development of our nations. 
 
11 
 
 Teodoro Moscoso : Venezuela and the alliance 
 
 FOR PROGRESS 
 
 X AM PLEASED that I could join you in this Thirteenth Annual 
 Conference, and also that we are discussing Venezuela's develop- 
 ment program— a topic in which I have a keen interest as United 
 States Coordinator for the Alliance for Progress. My attachment 
 to Venezuela has been formed through personal association with 
 President Betancourt, many of his key advisers, and many other 
 Venezuelans for a number of years, as well as during my assignment 
 as United States Ambassador to that country. 
 
 While I was assigned to Caracas, I had an opportunity to come 
 to know and respect many of the governmental, private industrial, 
 agricultural, and labor leaders present here today. I am especially 
 impressed that the chairman of this luncheon is Harry Jarvis and 
 that his company has joined with the University of Florida in 
 sponsoring this conference. This act of public service typifies 
 Creole's policies of active participation in Venezuelan life and the 
 dedication of most United States companies operating there to the 
 cause of democratic development. It is my hope that United States 
 business throughout Latin America will play a similarly positive 
 role. This would do much to improve the image of our country 
 throughout the hemisphere and speed up substantially the attain- 
 ment of Alliance for Progress objectives. 
 
 I am also pleased to see Armando Gonzalez, president of the 
 Landworkers Federation of Venezuela. The labor movement in 
 Venezuela has demonstrated that if unions are encouraged to par- 
 
 116 
 
PUBLIC SECTOR OF THE ECONOMY 117 
 
 ticipate in development planning and implementation they re- 
 spond constructively to the demands of their country; and the 
 Landworkers Federation— together with their fellow trade unionists 
 of the Venezuelan Confederation of Labor— have become prime 
 movers on behalf of progress and democracy. 
 
 Venezuela represents one of the most dramatic development ex- 
 periences in our hemisphere. Less than five years ago, this Carib- 
 bean republic emerged from dictatorship and set her foot firmly 
 on the path of constitutional democracy. Her leaders have been 
 faced by a continual onslaught of the extremist opponents of popu- 
 lar government; the far right and the far left have alternately at- 
 tempted to undermine the government which the Venezuelan peo- 
 ple elected in December, 1958. Terrorist activities, attempted 
 golpes de estado, and uprisings by minorities within the armed 
 forces have plagued but not deterred the Venezuelan government 
 during the last three years. We have watched it overcome each of 
 these political crises and move gradually ahead with the implemen- 
 tation of its plans for progress. 
 
 The story of Venezuelan development under democratic govern- 
 ment began before twenty republics of the Western Hemisphere 
 met in Punta del Este in August, 1961, to form the Alliance for 
 Progress. The direction and thrust of Venezuela's efforts anticipated 
 the spirit and thrust of the Alliance. President Betancourt called 
 for internal reforms and self-help in 1959 and then set about to 
 build his development plans around these principles. 
 
 Earlier speakers have already analyzed many of the key programs 
 of the Betancourt administration— land reform, tax reform, gearing 
 up the public administration, expansion of public education and 
 worker training, and promotion of private enterprise. You have 
 been informed of progress and problems which I need not repeat 
 here. I should only caution you that, as I learned during my stint 
 in the Puerto Rican Development Administration, the first phase 
 of carrying out a development program is the most difficult— with 
 results often hard to gauge. There is no easy road to national de- 
 velopment and economic prosperity. Experimentation is often the 
 handmaiden of success. The experience to date in Venezuela is 
 very encouraging, and short-run difficulties should not blind us to 
 the signs of long-term accomplishment. 
 
 Two factors of the Venezuelan experience are most significant 
 to the hemisphere as a whole: first, the emphasis on self-help mea- 
 sures and internal reforms as the basis for moving ahead to genuine 
 
118 The Caribbean : Venezuelan Development 
 
 self-sustaining growth; and, second, the conscious effort to involve 
 as broad a cross section of the Venezuelan people as possible in the 
 developmental process. 
 
 These two policies have developed the spirit and substance of 
 Venezuela's development effort; they cut across all the substantive 
 programs; and they have created the conditions necessary for 
 balanced economic growth and social betterment within the frame- 
 work of constitutional democracy. 
 
 // 
 
 These same two elements— self-help and popular involvement- 
 have been championed by the leaders of our hemisphere since 
 Washington, Bolivar, and Marti, and they are the philosophical 
 basis of our new Alliance. Only by winning the support of the 
 people can we inject momentum and drive into the effort to de- 
 velop our human and material resources. 
 
 This Alliance is not another assistance program by the United 
 States. It is a multilateral undertaking which was consecrated in 
 the Charter of Punta del Este, signed on August 17, 1961. Its basic 
 principles were conceived by Latin Americans which found re- 
 sponse in the United States. It evolved from the work of Latin 
 American economists and thinkers in the postwar period; from 
 the proposal of former President Kubitschek of Brazil for Operation 
 Pan-America; it was nurtured by the Betancourts, the Figueres, and 
 the Lleras Camargos. It was anticipated by former President Eisen- 
 hower in his endorsement of the Act of Bogota. And, it was President 
 Kennedy on March 16, 1961, who called for the marshalling of the 
 resources of all the hemisphere republics to form an Alliance for 
 Progress which he characterized as "a vast cooperative effort, unpar- 
 alleled in magnitude and nobility of purpose, to satisfy the basic 
 needs of the American people for homes, work and land, health and 
 school— fec/io^ trabajo y tierra, salud y escuelas." 
 
 The Charter of Punta del Este is the inter-American compact 
 for progress. It is not an instrument of the United States but a 
 statement of the economic, social, and political goals of all the 
 signatory states. It demands vast efforts by the Latin American 
 governments and pledges United States financial and technical 
 assistance to support these efforts. It recognizes that these goals 
 cannot be achieved overnight, calling for ten years of coordinated 
 endeavor. 
 
PUBLIC SECTOR OF THE ECONOMY 119 
 
 The Charter calls for policies designed to strengthen and improve 
 democratic institutions, to draw up and implement national plans 
 for development, to carry out administrative and social reforms, and 
 to accelerate the rate of growth in each of the Latin American 
 states. 
 
 The heaviest obligations were assumed by our Latin American 
 partners. Of the $100 billion estimated necessary to finance the 
 ten-year development program, $80 billion are to come from the 
 Latin American countries themselves, and $20 billion from ex- 
 ternal sources, with the United States providing the major share. 
 This United States share can be estimated at $13 billion, with $3 
 billion coming from new private investments. The private sector, 
 I feel, will meet the estimate for it if the investment climate in 
 Latin America is adequate. 
 
 In Latin America, each signatory country is pledged to devote 
 an increasing share of its own resources to investments in social 
 and economic development, to accelerate rational industrialization, 
 to diversify the productive base of the national economic struc- 
 tures, and to strengthen Latin American economic interdependence 
 and cooperation. 
 
 The Charter also requires each country to raise educational, 
 health, and other social levels as well as to make the benefits of 
 economic progress available to citizens of all economic and social 
 groups through more equitable distribution of national income and 
 higher living standards. 
 
 The threads which run through all of these goals are self-help 
 and popular involvement. None of the goals can be attained with- 
 out self-help and internal reforms; and none can be accomplished 
 without the full involvement of all the strata of the body politic. 
 
 In the year since the proclamation and initiation of the Alliance 
 for Progress, there have been substantial gains along with some 
 set-backs. In Mexico City, during October, 1962, the First Annual 
 Meeting of the Inter-American Economic and Social Council at 
 the Ministerial Level met to evaluate this first year of the Decade 
 of Progress and to plan for the future. There was optimism, and 
 there is good cause for it— because our Latin American partners 
 demonstrated their unanimous determination to press ahead with 
 the Alliance through greater self-help and more extensive efforts to 
 generate popular commitment to the objectives of the Alliance. 
 Dr. Felipe Herrera, president of the Inter-American Development 
 Bank, told the National Press Club in Washington on November 
 
120 The Caribbean : Venezuelan Development 
 
 14, 1962, that the Mexico council meeting "demonstrated the ma- 
 turity with which all the countries of the Hemisphere are seeking 
 to move forward in a common policy designed to achieve the eco- 
 nomic and social welfare of the Hemisphere in accordance with 
 the principles of the Charter of Punta del Este . . . ." For the first 
 time in an inter-American meeting there was an utterly candid, 
 mutually and constructively critical dialogue among the Latin 
 American delegations— large and small. Out of it came a much 
 improved understanding of where we are, where we want to go, and 
 what is needed to get to our goals. Out of it also came a new sense 
 of solidarity and urgency, forged in the crucible of a crisis that 
 stripped our relationships down to essentials— the essentials of our 
 need to stick together and to get on with the job of developing the 
 lands of this new world. 
 
 /// 
 
 The policies of the Betancourt administration place it in the van- 
 guard of the Alliance. Its programs present one of the best illus- 
 trations of the application of the principles of the Charter of Punta 
 del Este. Few Latin American countries can match its self-help 
 measures. 
 
 Self-sustaining growth requires the building of a sound internal 
 base for economic and social evolution. Its ingredients are the 
 realistic appraisal of needs, problems, and resources, as well as the 
 establishment of goals for the country's development and programs 
 destined to achieve these goals. This process exacts of each Latin 
 American state genuine reforms to improve the efficiency of the 
 public administration, to promote agricultural and industrial ex- 
 pansion, and to raise the educational level of the people. Above 
 all, it demands the creation and strengthening of those internal or- 
 ganizations and institutions through which programs can become 
 reality. 
 
 These reforms in Venezuela have begun, and self-sustaining 
 growth is being built into the framework of national development. 
 As United States coordinator of the Alliance, I have watched closely 
 how the Venezuelan government has flexibly moved forward toward 
 its goal of ploughing back petroleum revenues to diversify its eco- 
 nomic and social base. I have not ignored the problems which 
 have emerged, nor has the Betancourt administration; no dynamic 
 society can avoid problems of readjustment and transition. 
 
PUBLIC SECTOR OF THE ECONOMY 121 
 
 The list of self-help measures undertaken by Venezuela is im- 
 pressive. It includes the creation or improvement of social and 
 economic institutions to meet the needs of the people for new 
 industries, housing, agricultural credit, education and training, 
 better health, and a variety of other public and private services. 
 I have selected five of these self-help measures which are of special 
 significance to the spirit of the Alliance. 
 
 The first relates to the improvement of the governmental effi- 
 ciency. There can be no self-sustaining growth in any country 
 without an effective public administration. In the discussions of 
 the public sector, you have already considered the role of the 
 government in the Venezuelan economy. You are aware of the 
 characteristics and accomplishments of the public sector as well as 
 the procedural and personal deficiencies it must still overcome if it 
 is to attain the desired standards of effectiveness which have been 
 set for it. I will only focus here on the work of the Public Admin- 
 istration Commission— an agency set up by the government of 
 Venezuela to spearhead the drive for requisite efficiency in the pub- 
 lic sector. 
 
 Four years ago— three years before the signing of the Charter of 
 Punta del Este— the Venezuelan government set up this commission 
 on the recommendation of a United Nations advisory team. The 
 commission sought technical help from private consultants and in- 
 ternational experts to guide it during its initial stages as well as to 
 train its staff. Now, it is geared up to carry out its own work— with 
 decreasing dependence upon external advisory assistance. 
 
 In four years, it has evaluated the needs and problems of the 
 national, state, and municipal governments as well as those of the 
 autonomous institutes and enterprises of the state. It has formu- 
 lated concrete proposals to improve and unify administrative pro- 
 cedures, fiscal control, and internal operations. Its efforts have re- 
 sulted in the preparation and submission to the Venezuelan Con- 
 gress of five basic laws which would transform the public adminis- 
 tration. These proposals include: a Civil Service Merit System; 
 Reorganization of the Office of the Comptroller General; an Organic 
 Law for the Budget; an Organic Law for Autonomous Institutions; 
 and an Organic Law for the National Treasury. 
 
 The commission has emphasized better recruitment, selection, 
 and utilization of public employees. It has instituted in-service 
 training for public servants. The commission administers sixty 
 different aptitude tests for employees in various ministries and 
 
122 The Caribbean : Venezuelan Development 
 
 autonomous agencies. It has laid the groundwork for the intro- 
 duction of a merit system by working out job classification stand- 
 ards and sponsoring studies of wage and salary scales in the pub- 
 lic and private sectors. 
 
 In short, an institution has been set up which is responsible for, 
 and actively engaged in, gearing up the public administration to 
 provide the services essential for a developing nation. This is self- 
 help of the most fundamental nature. 
 
 The second measure is one of the most difficult and often the 
 least politically palatable of all self-help efforts: fiscal responsibility. 
 The Venezuelan government has faced up to this need through 
 reforms in its exchange regulations and, difficult and most impor- 
 tant, by gradually bringing its expenditures into balance with its 
 revenues. In 1961, the government instituted controls over expendi- 
 tures and reduced its deficit by Bs.400 million; in 1963, it looks for- 
 ward to a balanced budget without unduly curtailing essential de- 
 velopmental projects. 
 
 Its fiscal policies have emphasized public investment in develop- 
 ment—with sizable percentages of the budget earmarked for capital 
 projects. It has progressively overcome the fiscal problems which 
 it inherited from the dictatorship and has gradually developed the 
 knowledge and tools for sound fiscal management. 
 
 Its record of investments in roads, ports, communications, and 
 other ingredients of the infrastructure is among the best in the 
 hemisphere. The budget allocates increasing sums to human re- 
 sources developments through more and better schools, industrial 
 training, health centers, and social services. The Venezuelan gov- 
 ernment also appears to have realistically faced its needs for in- 
 creased revenues to cover its expanding investments. The tax re- 
 reform of February, 1961, resulted in increased collections estimated 
 at Bs.600 million in 1961 and will amount to an estimated Bs200 
 million more in 1962. As a result of administrative reforms and 
 increased taxes under the July, 1961, Law of Urgent Economic 
 Measures, tax declarations filed in 1961 increased 22 per cent over 
 1960. 
 
 Moreover, the income tax office announced that collections in 
 1961 increased to Bs.2,362 million as against Bs.1,813 million in 
 1960. This increase was due in part to the implementation of the 
 "pay as you go" system for corporations as well as improved pro- 
 cedures within the tax office for the administration and enforce- 
 ment of income taxes. 
 
PUBLIC SECTOR OF THE ECONOMY 123 
 
 There is no better evidence of self-help than these measures 
 taken to improve the fiscal structure of the Venezuelan government. 
 
 National planning is the third self-help area on which I would 
 like to comment at this time. Venezuela last month became the 
 fifth Alliance nation to present its development plan to the ap- 
 propriate inter-American agencies. In your discussions yesterday, 
 you had the opportunity to hear from the director of the National 
 Planning Commission, or CORDIPLAN, Dr. Manuel Perez Gue- 
 rrero, about his agency and its approach to planning. Venezuela's 
 commitment to national programming anticipated the Charter of 
 Punta del Este, since it places great emphasis on the need for each 
 signatory power to develop realistic, flexible plans for expanding 
 productive capacity in industry, agriculture, mining, transport, 
 power, and communications and for improving conditions of urban 
 and rural life— including better housing, education, and health. 
 
 Such planning requires assignment of priorities, definition of 
 methods, evaluation of costs, allocation of resources, and mobiliza- 
 tion of public and private resources. It calls for difficult decisions. 
 The National Planning Agency of Venezuela has been in the fore- 
 front of the Latin American countries in doing this vital job. 
 
 A fourth self-help area which warrants our attention is public 
 policies to increase agricultural and industrial diversification and 
 production. No government can work toward economic develop- 
 ment without the full commitment of the private sector. The eco- 
 nomic woes besetting the Soviet Union and all other Communist- 
 ruled countries, including Cuba, are the best evidence of the in- 
 ability of government to do it alone. 
 
 The Charter calls upon the signatory powers to encourage pri- 
 vate action in support of the development program and to stimu- 
 late private enterprise as the means for accelerating the growth 
 rate and reducing unemployment. The Charter also calls for 
 internal reforms to foment the role of the private sector in agri- 
 cultural and industrial expansion. 
 
 Venezuela has been moving toward the implementation of these 
 Charter objectives. You have heard from industrial, agricultural, 
 and governmental leaders about the policies, programs, and prob- 
 lems which characterize the Betancourt administration's efforts. 
 You have been apprised of its "Declaration of the Fundamental 
 Aspects of Venezuela's Economic Policy," which is designed to pro- 
 mote the participation of the private sector in national develop- 
 ment. Credit, tariff, lease-purchase arrangements, technical aids, 
 
1 24 The Caribbean : Venezuelan Development 
 
 and standards are incentives being used to stimulate private invest- 
 ment in those priority industries which help produce or save 
 foreign exchange, employ unskilled labor, utilize domestic farm 
 products and mining materials, expand internal production of low- 
 cost consumption goods, and promote the decentralization of in- 
 dustries throughout the republic. 
 
 You have studied the Agrarian Reform Law and the National 
 Farm Development Plan. You have discussed their impact on in- 
 creased agricultural production. You have been informed of the 
 credit facilities for farmers, including the recent introduction of 
 agricultural credit. Storage facilities have been expanded, co- 
 operatives of various kinds set up, irrigation works undertaken, and 
 rural housing and health given special attention. 
 
 All these actions are intended to create greater opportunities for 
 private as well as public investment. And the evidence points to 
 expanded private activity. Industrial activity has reached a record 
 level. Investment in manufacturing amounted to Bs.719 million 
 in 1961, the highest annual level in Venezuelan history. Agricul- 
 tural production climbed 6 per cent in 1961. Venezuela in three 
 years has become self-sufficient in ten major crops. One of these is 
 the production of eggs. When I arrived in Venezuela in 1961, 
 Venezuela was still importing up to 3 million eggs a day; today 
 she is not only self-supporting but exporting a surplus! 
 
 Some 55,000 farm families have now been settled on more than 
 2 million hectares of land of their own since 1959 under the Agrar- 
 ian Reform Law. Unemployment appears to have turned down- 
 ward after increasing steadily during 1960 and 1961. Petroleum 
 production has risen 8.4 per cent in 1962. 
 
 I am not ignoring problems and difficulties. I am merely putting 
 into perspective the relationship of Venezuela and the Alliance 
 and pointing out that the over-all results— based on the economic 
 evidence available— appear encouraging. 
 
 The final self-help measure is the up-grading of Venezuelan man- 
 power. Throughout the hemisphere, this undertaking of the 
 Betancourt administration is recognized as one of the outstanding 
 development programs in Latin America today. Venezuela has 
 recognized that her greatest underdeveloped resource is the un- 
 tapped skills and capabilities of her people; hence, she has directed 
 an increasingly significant share of her budget and energies into 
 schools, worker training centers, normal institutes, literacy cam- 
 paigns, and higher education. 
 
PUBLIC SECTOR OF THE ECONOMY 125 
 
 You have already heard Dr. Monroy analyze the direction and 
 goals o£ these programs— and describe some of the extraordinary 
 accomplishments. There are few countries in the world that can 
 cite a 93 per cent rise in primary school attendance in three years 
 through the construction of 4,481 new schools and an almost 60 
 per cent increase in the number of teachers. Venezuela is now fast 
 approaching universal elementary educational opportunity for all 
 her citizens. 
 
 Moreover, these efforts have not been limited to elementary edu- 
 cation but include 21 new normal schools, teacher training centers, 
 the initiation of Venezuela's first systematic nationwide program 
 to raise worker skill levels, 41 new public high schools, and over 
 53,000 more students, 33 new technical schools for over 18,000 new 
 students, a new university as well as a new Pedagogical Institute, 
 and a national literacy campaign which has taught almost 700,000 
 people since 1958. Venezuela has set further ambitious goals for 
 herself in improving the quality of instruction at the same time 
 that she further expands her school and training system. She 
 knows that other Latin American states have a long head start on 
 her in public education— but she is intent on closing this gap. 
 
 The five self-help measures to which I have referred illustrate 
 the magnitude of the internal effort taken by the Betancourt ad- 
 ministration and demonstrate why Venezuela is in the vanguard 
 of the Alliance. They dramatize the words of President Kennedy 
 when he proposed the Alliance on March 13, 1961: 
 
 Let me stress that only the most determined efforts of the 
 American nations themselves can bring success to this effort. They, 
 and they alone, can mobilize their resources, enlist the energies 
 of their people and modify their social patterns so that all, and not 
 just a privileged few, share in the fruits of growth. If this effort 
 is made, then outside assistance will give a vital impetus to progress; 
 without it, no amount of help will advance the welfare of the 
 people. 
 
 IV 
 
 Now to the other basic element in the Venezuelan experience: 
 a sense of involvement by the people in the development effort. 
 Governor Luis Muiioz-Marfn, speaking before the AFL-CIO Na- 
 tional Conference on Community Services in Chicago last May, 
 put it this way: 
 
126 The Caribbean: Venezuelan Development 
 
 The Alliance cannot be purely an economic undertaking, a 
 transfusion of capital and skills. To succeed, it must stir the hearts 
 of men; it must inspire them to dream and hope and then to work 
 hard and purposefully. It must have strong ideological content. 
 
 Nor is it enough to have only general ideological content. The 
 ideals of the Alliance must be fused with the national ideals in 
 each country. Only when Bolivians think of it as their Alliance, 
 will they unleash the energies which must be brought into play. 
 Only when the Ecuadoreans and the Hondurans feel that they 
 have a national program— evolved by themselves out of their own 
 needs, out of compassion for the human suffering of their own 
 countrymen, not something done for them in distant Washington- 
 will they rise to the great challenge of the Alliance. 
 
 This commitment to progress requires involving the key sectors 
 of the body politic in the processes of development. No society has 
 yet achieved full and complete involvement— even in times of 
 total war. Nor has any democratic government been free 
 from criticism by one group or another— even by some 
 directly engaged in the processes of decision making. Free societies 
 do not seek monolithic agreement, but flexibility through debate, 
 compromise, respect of principles, and acceptance of law. 
 
 Within Latin America, we have watched the progressive re- 
 structuring of the social and economic order. We have seen power 
 shift from small, tightly-knit groups to increasingly larger sectors 
 of the population. And, with the growth of these new sources of 
 power, there is an ever-increasing need to draw them into the de- 
 velopment process and to acquaint and involve them with national 
 policies and development programs— a need that meets their right 
 and their demands to participate. 
 
 In Venezuela, I had an opportunity to observe this broadening 
 of popular participation in the affairs of the government and in 
 the economy. I observed the participation of all sectors— labor arid 
 management, military and civilian, student and professor, urban 
 and rural— in the national life of Venezuela. I found a broad de- 
 gree of participation in national councils. The labor leader and 
 the management officer served on commissions and boards together. 
 The labor leader, the industrialist, and the farmer were increasing- 
 ly consulted on national economic policies. The military and the 
 civilian leadership progressively enlarged their spheres of mutual 
 interest and understanding. 
 
 This is truly the process of creating national involvement and 
 
PUBLIC SECTOR OF THE ECONOMY 127 
 
 identifying the aspirations of the people with the national goals 
 of development. 
 
 In my work as United States coordinator for the Alliance, I have 
 visited almost every country in the hemisphere— and have observed 
 the degree to which the various segments of the society have com- 
 mitted themselves to national goals. Few countries have equalled 
 Venezuela's record in this regard. 
 
 In Venezuela, the urban and rural work force through its na- 
 tional, regional, and local leaders plays an important role in the 
 formulation of public policy. The labor movement has acted 
 responsibly because the government gave it a chance to respond 
 as an equal in national councils. In many Latin American coun- 
 tries, we are troubled by the growing influence of the Communists 
 and Castroites in the urban labor movement and among farmers; 
 yet, in Venezuela, less than two months ago, the representatives of 
 over one million urban and rural workers met with top military 
 leaders at the headquarters of the Venezuelan Confederation of 
 Labor to discuss cooperative measures to defend Venezuelan de- 
 mocracy in the face of Communist terrorist campaigns. 
 
 I am equally impressed by the growing record of participation 
 by industrial and agricultural leaders in the Venezuelan develop- 
 ment process. Despite criticisms of the government's policy, a 
 dialogue has been established— and, industrialists like Eugenio 
 Mendoza are taking the lead in working with government leaders 
 in shaping policies and programs designed to develop the private 
 sectors of the economy. 
 
 As labor and management have developed close relationships 
 with government they have increased direct contact among them- 
 selves. Labor and management, after the fall of the dictator in 
 1958, worked out a pattern of industrial peace which still pervades 
 the Venezuelan economy. The sphere of collective bargaining is 
 extensive— with a growing acceptance by both labor and manage- 
 ment of their joint responsibilities and respective roles in modern 
 industrial democracy. 
 
 Involvement is thus a multilateral operation, requiring the forg- 
 ing of bonds among all the sectors of the society— not merely be- 
 tween the government and each group. I observed how the 
 Governor of the Federal District, Alejandro Oropeza Castillo, sought 
 to identify the foreign colonies in Caracas with the efforts to re- 
 duce unemployment and to expand industrial and commercial 
 activity. Not only did he try to reassure them of their status in 
 
128 The Caribbean: Venezuelan Development 
 
 Venezuela but he urged them to strengthen their relationships with 
 all levels of the Venezuelan government and society. 
 
 I have been impressed by the way in which many United States 
 businessmen have responded to the new conditions of Venezuelan 
 economic and political life during the last three years. The role 
 of the Creole Petroleum Corporation warrants special mention. 
 For almost two decades, it has fostered Venezuela's educational 
 and cultural development by training its own workers and through 
 the Creole Foundation which supports numerous projects outside 
 the petroleum industry. Last year, it founded the Creole Invest- 
 ment Corporation, a wholly owned subsidiary with a working 
 capital of $10 million whose objective is to make minority equity 
 investments in business ventures outside the oil industry. It has 
 stimulated economic diversification and invested to date more than 
 $4 million in 14 enterprises hiring over 1,200 people and contribut- 
 ing to the employment of an estimated 5,000 additional Venezue- 
 lans. The majority of the stock in these enterprises is Venezuelan, 
 and the corporation, I understand, looks to the time when it will 
 be entirely Venezuelan. 
 
 Such initiatives come only when there is a sense of involvement. 
 The Venezuelan government has encouraged this involvement 
 through the Development Corporation, Productivity Center, and 
 other industrially-oriented activities by government ministries. Dif- 
 ferences exist over petroleum policies and the role of the state in 
 basic industrial development; but, the dialogue exists and the 
 various sectors are engaged in seeking solutions within the frame- 
 work of democratic development. 
 
 The effort to incorporate the Venezuelan people into the de- 
 velopment effort is not limited to the already organized sectors of 
 society. Through the community development program sparked by 
 Dr. Carola Ravel, a broad cross section of the mass of the people 
 has been stimulated to make progress a meaningful part of their 
 lives. 
 
 Dr. Ravel began working in 1959 in four communities; today her 
 efforts extend to 258 in 13 states where the people are engaged in 
 over 800 projects of self-improvement, ranging from construction 
 of roads, water supplies, community centers, houses, and schools 
 to literacy campaigns, training in home economics, and the estab- 
 lishment of cooperatives. I visited the city of Anaco with Dr. Ravel 
 in 1961 to see the work of the community in paving its streets and 
 building community centers; I was impressed not merely by the 
 
PUBLIC SECTOR OF THE ECONOMY 129 
 
 dimensions of material improvement wrought but also by the spirit 
 of the people. One unemployed oil worker told me that day that 
 he was proud to have taken part in the community projects, because 
 it had made him an active participant in Venezuela's efforts for 
 self-development. 
 
 The success of the community development experience has led 
 to the creation in February, 1962, of the Foundation for Com- 
 munity Development and Municipal Improvement which will spear- 
 head the progressive extension of these activities to all corners of 
 the republic. I am proud of the fact that our agency has recently 
 loaned $30 million to spread the good work of the foundation over 
 the length and breadth of Venezuela. 
 
 The involvement of these various social and economic groups— 
 from urban and rural areas— in the programs and processes of 
 national development has been effective in Venezuela because it 
 is a conscious effort of the government itself— an essential ingredient 
 of the policy and politics of the Betancourt administration. This 
 psychological involvement of the people may well be the corner- 
 stone of success for development not only in Venezuela but in all 
 the Alliance countries. 
 
 V 
 
 The harnessing of the energies of our peoples and their com- 
 mitment to the goals of the Alliance constitute the greatest long- 
 term challenge to this hemisphere. Where national leaders such 
 as Romulo Betancourt are attempting to accomplish these ob- 
 jectives, the United States— as an Alliance partner— stands ready to 
 provide the external economic and technical assistance which can- 
 not be provided from the resources of the countries themselves. 
 
 It is the consensus of most inter-American experts that, despite 
 political disorder and sabotage organized by the Fidelistas and 
 Communists, Venezuela is making real progress. The economic 
 and social indicators bear out this conclusion. There is every reason 
 for confidence that Venezuela will be among the first Latin Ameri- 
 can countries to demonstrate effectively to her people that man's 
 unsatisfied aspirations for economic progress and social justice can 
 be best attained by free men working within the framework of 
 democratic institutions. 
 
Part IV 
 
 PRIVATE SECTOR OF THE ECONOMY 
 
Peter R. Nehemkis, Jr.: wanted: a business 
 
 ALLIANCE FOR PROGRESS 
 
 V ENEZUELA is a microcosm for all the burning issues of Latin 
 America. But it is something more. Venezuela is the beacon light 
 of hope for democracy in Latin America. If the lights go out in 
 Venezuela, one of the richest prizes in the Western Hemisphere 
 will have been won by the Castristas. 
 
 Our dialogue concerns a crisis in the confidence of capitalism 
 in Latin America. In the Western Hemisphere all roads once led 
 to Havana. We, too, begin at Havana. 
 
 United States private investment in Latin America has been one 
 of the major casualties of the Cuban revolution. With no more 
 formality than a lengthy TV harangue. Dr. Castro successfully wiped 
 out $1 billion of American investments in the Pearl of the Antilles. 
 Expropriation hangs like a sword of Damocles over the remaining 
 $8 billion of United States investments scattered throughout the 
 southern continent. 
 
 The meaning of Dr. Castro's deepening shadow is apparent from 
 these simple figures. In 1957, the flow of United States direct in- 
 vestment to Latin America was over $1.5 billion. In the first half 
 of 1962, it was precisely zero. Not only has investment in Latin 
 America been arrested, but some companies are bringing their 
 capital home. What this implies, in a word, is that United States 
 business has lost confidence in Latin America. 
 
 133 
 
134 The Caribbean : Venezuelan Development 
 
 The cessation in United States investment means that Secretary 
 of the Treasury Dillon is shy some 30 per cent of his $1 billion 
 Punta del Este commitment. Of this amount, $300 million was to 
 be provided through United States private investment. Now if 
 only a shortage of $300 million were involved, this would be small 
 change to the United States government. Belatedly, however, the 
 Washington policymakers have come to the realization that, with- 
 out a continued flow of new United States private capital, the 
 Alliance for Progress is a stick of dynamite with no percussion cap. 
 
 Some in the business community believe the loss of confidence 
 in Latin America results largely from shrinking profit margins. 
 Superficially, the statistics appear to support this contention. In 
 1960, the average return on investments in Latin America (after 
 U. S. taxes or remittances) was 9.2 per cent— just about the same 
 average return as from the United States. In short, by staying 
 home, without incurring any risks or losses from currency devalua- 
 tion, you could, statistically speaking, do just as well as in Latin 
 America. On the other hand, the after-tax return from investments 
 in the European Common Market was almost 14 per cent. The 
 more than $7.5 billion of United States direct investment which 
 had moved into West Europe by the end of 1961 is clear evidence 
 of the magnetic attraction of the European Common Market. 
 
 These statistics, however, tell only part of the story; perhaps not 
 even the most significant part at that. It is Latin America's political 
 instability— more than any other element in the investment equa- 
 tion—which has sapped investment confidence. 
 
 Political instability in Latin America is endemic. One hundred 
 and fifty years after the breakup of the Spanish and Portuguese 
 empires representative government is still an elusive aspiration. 
 Democratic constitutional trappings borrowed from the United 
 States and parliamentary edifices appropriated from France are 
 largely theatrical stage props. Latin America has a three-beat 
 political rhythm: dictatorship, revolution, dictatorship. In the 
 service of truth let it also be said that if democracy is conspicuous 
 by its absence in Latin America the Colossus of the North is not 
 without some blame. United States' history of support for the 
 status quo has scarcely been consistent with the democratic cause. 
 
 Contemporary events in South America's major countries are 
 profiles of political instability. Since the resignation of Janio 
 Quadros from the presidency there has been for all practical pur- 
 poses no functioning government in Brazil. One of Brazil's best- 
 
PRIVATE SECTOR OF THE ECONOMY 135 
 
 known economists, Dr. Celso Furtado, characterizes Brazil as in a 
 prerevolutionary state. If and when the Northeast explodes, Cuba 
 will seem like a firecracker. 
 
 In Argentina, the seizure of power by the military under a thinly- 
 disguised civilian regime completed the economic and political 
 bankruptcy of the nation begun by Peron. Argentina has virtually 
 ceased to be a monetary economy: it lives on lOU's. Tonight, in 
 Buenos Aires there is no leadership— no political leadership, no 
 economic leadership . . . not even military leadership. It is a 
 governmental void. Like Banquo's ghost the Peronistas continue 
 to haunt the stage. Nor has the end of this unhappy chapter been 
 reached. 
 
 The military coup in Peru ripped the props from under the 
 Alliance for Progress. The Junta functions in a political vacuum, 
 provides a surface calm, and allows business-as-usual to flourish. 
 
 Venezuela is Dr. Castro's primary target. After his abject hu- 
 miliation at the hands of the Russians, Dr. Castro must destroy 
 Betancourt in order to redeem himself as Latin America's No. 1 
 revolutionary. If by its disruptive tactics the extreme left can suc- 
 ceed in creating a situation of anarchy which will force the Vene- 
 zuelan military to take over, the Communists are poised in the wings 
 prepared to take eventual control. 
 
 Still in prospect elsewhere on the continent are additional 
 golpes de estado to preserve the status quo by politicians who 
 wear the uniform of generals, or Nasser-like seizures of power by 
 junior officers who want social reforms under a "directed democ- 
 racy," with the military calling the shots. 
 
 In the coming election in Chile, for the first time in the Western 
 Hemisphere we may witness a democratically-elected president who 
 represents "the Marxist alternative." 
 
 From the Rio Grande to the Tierra del Fuego, where Argentina 
 like a pointing finger reaches into the Atlantic waters rushing to 
 join the Pacific, the continent is wracked by political violence, if 
 not outright anarchy. 
 
 II 
 
 In one of the great tragic dramas of our time an entire continent 
 is hemorrhaging from its internal economic and political wounds. 
 For at least another generation, Latin America is bound to undergo 
 a vast convulsion. 
 
136 The Caribbean: Venezuelan Development 
 
 This is the context in which United States investments will have 
 to be made, if they are made at all. Since many American com- 
 panies have managed to get along for a good number of years in 
 this environment of political turbulence, why at this late date, it 
 may be asked, are they beginning to close up shop? Companies with 
 long experience in Latin America are not leaving. A United Fruif 
 in Central America or an Anaconda Copper in Chile might wish 
 that it could take its cash and come home. But they can't. For 
 all practical purposes they are frozen into their investments. Others 
 have no intention of departing. Who is pulling out? Mainly, 
 the newcomers to Latin America. 
 
 Paradoxically, investors from other countries do not appear to 
 share the adverse reaction of United States capital to Latin America. 
 Japanese businessmen are swarming over the hemisphere in search 
 of deals. The West German Krupp empire finds Brazil's chaos and 
 Argentina's political and economic bankruptcy promising soil for 
 the future. Swedish, Italian, and French firms continue to probe 
 for profitable investment opportunities. 
 
 The explanation for this continuing interest as against the 
 American withdrawal lies, I suspect, in an emotional predisposition 
 towards Latin America, and in long experience with foreign in- 
 vestments. Neither political instability nor the absence of certainty 
 seems to worry the non-American entrepreneur. Moreover, he ap- 
 pears to have a greater capacity for environmental adaptation. In 
 a word, the non-American investor has the knack of being able to 
 live in the mouth of an active volcano. 
 
 /// 
 
 Practical and dramatic solutions to the current crisis in capital 
 require joint action by United States business and the United States 
 government. It cannot be solved by government or business acting 
 alone. Our inability to resolve this painful dilemma paralyzes 
 effective action. 
 
 In part, the difficulty in reaching a rapport with the government- 
 al administration is of our own doing— or, more precisely, our lack 
 of doing. How often and when has the story been told of what 
 United States business really looks like in Latin America? 
 
 Whatever may have been its historic shortcomings. United States 
 business now in Latin America is not the "exploitive leech," the 
 insensitive tool of "Yankee imperialism," which the Castro-Com- 
 
PRIVATE SECTOR OF THE ECONOMY 137 
 
 munist propaganda would have the Latin American masses believe. 
 
 With its powerful thrust for expanding consumer markets, 
 United States business now in Latin America is, in its own right, 
 a revolutionary force. United States business is, in fact, the sales- 
 man for the revolution of rising demands. The hot dreams in 
 the heads of Latin America's urban slum dwellers and middle 
 groups are not stimulated by Karl Marx's Das Kapital, but by the 
 shop windows bulging with refrigerators, ranges, and TV and 
 radio sets. Indeed, American business makes Chairman Khrush- 
 chev look like a piker. History will record as one of the consum- 
 mate ironies of our time that the grave digger of the feudal societies 
 was the American business presence in Latin America. 
 
 Nevertheless, myths die hard. The image of a buccaneering, 
 greedy, socially atrophied American business lingers on. In nu- 
 merous layers of Washington officialdom there is little or no knowl- 
 edge of the socially constructive and creative role being played 
 by many United States companies in Latin America— Creole Pe- 
 troleum Co.; Sears, Roebuck and Co.; Kaiser Industries; Deltec 
 Corporation; International Basic Economy Corporation, to mention 
 but a few. Scarcely a handful of the members of Congress have 
 any knowledge of what a score of United States companies have 
 accomplished to identify themselves genuinely with the aspirations 
 of the people of Latin America— for instance: the Chase Manhattan 
 Bank with its development of a cattle industry in Panama; or the 
 Whirlpool Corporation, through its sponsorship of a Technical 
 Institute at Medellin, Colombia, for the training of high school 
 graduates in the disciplines of middle management. 
 
 There is no patent medicine which is guaranteed overnight to 
 bring the business and governmental communities into an effective, 
 working partnership. If joint action is not feasible, why can't that 
 sector of the business community which is concerned over the 
 plight of Latin America act on its own? Why not a Business 
 Alianza para el progreso? 
 
 If American business is prepared to "roll its own" Alliance, 
 there must be cleared away some of the underbrush which con- 
 tributes to misunderstanding. As a first step, we should jettison 
 the notion that there are no profits to be made in Latin America. 
 There are— and will continue to be— profitable business opportuni- 
 ties in a number of Latin American countries, for it must be 
 remembered that the fallacy of the statistical average lies in its 
 concealment of the profitable individual investment. 
 
138 The Caribbean : Venezuelan Development 
 
 American business can take advantage of these profitable oppor- 
 tunities if it will forego the will-o'-the-wisp pursuit of political 
 stability as a condition for doing business. Political stability pre- 
 supposes a static society. Latin America is a volatile, diverse, and 
 changing society. It is a society powered by three revolutions all 
 moving at the same time: an industrial revolution, an agrarian 
 revolution, and a social revolution. In Latin America, the twen- 
 tieth century is in headlong collision with the thirteenth. 
 
 As a second step, we might tear a page out of the book of our 
 international competitors. How do they do it? The answer is: an 
 ability to adapt. Actually, in adapting to a revolutionary environ- 
 ment, little more is required from United States business than 
 that it do those things in Latin America which are accepted as a 
 matter of course here at home: support of education, training of 
 nationals for responsible supervisory and managerial positions; 
 sharing of profits, bonafide collective bargaining, opening up stock 
 ownership to the people of the country; in short, do those things 
 which encourage a better standard of living and a better dis- 
 tribution of income, if for no other reason than the inability to 
 sell to a poorhouse. We should be willing to share the benefits of 
 our enlightenment not through motives of paternalism, but for 
 the same reasons which prevail here at home: it makes good sense. 
 
 As a third step, the upper reaches of management in the United 
 States must recognize that effective environmental adaptation re- 
 quires some changes in mental attitudes on the part of some of the 
 local managers in Latin America. Honorary membership in the 
 Jockey Club ought not to transform an ordinarily decent American, 
 with all of the instincts for democracy, into a Spanish grandee. 
 Nor does it seem necessary in the exchange of the social amenities 
 for the Good American to adopt the obsolete social and political 
 philosophies of the Oligarchy. 
 
 IV 
 
 Latin America— as does the United States— has a mixed, private, 
 and governmental economy, only more of it. Latin America in- 
 tends to keep it that way. Latin Americans do not look with 
 favor on the United States business representative who seeks to im- 
 pose on his operation in Latin America a doctrinaire brand of 
 United States capitalism which has long ceased to exist in the 
 United States except as a myth invoked at the annual trade asso- 
 
PRIVATE SECTOR OF THE ECONOMY 139 
 
 ciation banquets. While Adam Smith may be a saint before whom 
 North American businessmen sentimentally genuflect, it is down- 
 right silly to attempt to include him in the already heavy roster 
 of Latin America's celestial hierarchy. 
 
 At a time when the winds of nationalism are reaching gale pro- 
 portions in some parts of Latin America, United States business 
 needs a strong anchor to the windward. The wholly-owned sub- 
 sidiary does not provide the requisite security. Probably no other 
 aspect of United States business is more irritating to the scab of 
 nationalism than the totality of control of the wholly-owned 
 subsidiary. Nor is the irritant confined solely to Latin America's 
 intellectuals and bureaucracy: it is shared by Latin America's 
 businessmen. What Latin Americans resent— and not without justi- 
 fication—is the United States manager who cannot make decisions 
 without first obtaining the approval of his home office. From any 
 point of view this bespeaks a boy sent to do a man's job. From 
 the Latin American view it smacks of economic colonialism. 
 
 In passing, it might be noted that this is not an idiosyncracy of 
 Latin Americans. The Canadians have expressed their version of 
 "Yanqui-go-home" by their sensitivity to Canadian subsidiaries of 
 American firms. Among the European Common Market countries 
 the French, for instance, take exception to the wholly-owned 
 United States company. Both the French governmental adminis- 
 tration and the French business community believe that basic 
 economic decisions laid down, say in New York or Detroit, may be 
 inimical to the national investment objectives attained through 
 joint government-industry planning. 
 
 In short, effective environmental adaptation requires that United 
 States business become a Colombian, an Argentinian, a Brazilian 
 company instead of being a foreign appendage of its American 
 parent. 
 
 The key to successful environmental adaptation is the instinct 
 for what makes other people tick. One of the truly great illusions 
 of the American mind is the assumption that other people— mean- 
 ing the "natives"— will react to our policies in the same way as we 
 would react, if we stood in their bare feet. We might spare our- 
 selves a good deal of frustration if we first took a look at the 
 feet and then shaped our policies accordingly. 
 
140 The Caribbean : Venezuelan Development 
 
 Successful adaptation necessitates abandonment of the American 
 compulsion to play missionary to the world. It is a delusion to 
 believe that there is a magic pill which will convert Latin Ameri- 
 ca's shockingly mismanaged societies into neat replicas of the 
 United States of America. Or, that the inherited Spanish passion 
 for individualism and the dispersive nature of the Spanish charac- 
 ter (unique in the Western world) can be transformed into the 
 American obsession for collective action. Or, that there will soon 
 be a change in the fatal Spanish characteristic of producing the 
 perfect blueprint which is never put into operation. Latin Ameri- 
 cans sometimes mock themselves with an old Spanish proverb: 
 Se ohedece pero no se no se cumple! (We obey but we do not ful- 
 fill!). 
 
 If United States business can stand a bit of mental house cleaning 
 so, too, can Latin American business. If I am critical of Latin 
 America's capitalists, it is, however, in the spirit of a friend who 
 asks his colleagues to look again at the hands of the clock: they 
 are now perilously close to midnight. Time is running out for all 
 of us— the Alliance for Progress, Latin America's business elite, 
 our own business leadership. 
 
 VI 
 
 The trouble with the Latin American capitalist is that he is a 
 hundred years behind the times. Too many Latin American capi- 
 talists retain the mental baggage of an itinerant peddler: buy and 
 sell quickly, always have your luggage packed for a fast getaway. 
 He looks upon investment as a treasure to be plundered instead 
 of an expectation to be nurtured. He has yet to recognize that 
 the return on an investment must be reasonable, that profits must 
 be ploughed back into the business and not siphoned off for safe- 
 keeping abroad. If it is to be employed usefully, capital cannot 
 be put into idle land because ownership of land is a status symbol 
 or a hedge against inflation. He has yet to understand that pay- 
 ment of taxes to the state is not a form of feudal tribute— tributo 
 and trihutario, it might be recalled, are the Spanish equilavents for 
 "taxes" and "taxpayer." As a footnote, I should add that through- 
 out Latin America the very idea of handing over tax monies to 
 government functionaries who would steal it is regarded as a 
 grim jest, a peculiarly Yankee bit of humor. 
 
 The Latin American capitalist is not sufficiently aware that the 
 
PRIVATE SECTOR OF THE ECONOMY 141 
 
 real security base of capitalism rests on the people's identification 
 with and confidence in the capitalist system. Identification results 
 from jobs, good wages. But this is not enough. More important 
 is the feeling of confidence. Confidence exists when the workers 
 themselves believe that the patron— their own boss— is himself 
 associated with social progress. 
 
 There is no future for Latin American capitalism if, in the eyes 
 of the people, it is linked with a closed, feudal, aristocratic society. 
 If Latin American capitalism is to be accepted, if it is to prosper, 
 if it is to play a creative role in the development of the hemi- 
 sphere, it must become the champion of an expanding and egali- 
 tarian society. 
 
 It would be a gross distortion of reality— a caricature— if the 
 impression were left that all Latin American capitalists were part 
 of a feudal backwash. Eugenio Mendozo and Gustavo Vollmer in 
 Venezuela; and Klabin and Byington families in Brazil; Alberto 
 Samper and Luis Echavarria in Colombia; Eugenio Heiremans in 
 Chile; Francisco de Solo in El Salvador— these businessmen with 
 others like themselves throughout the continent are members of 
 that select company of men who are part of the mainstream of 
 twentieth century capitalism. 
 
 One thing which the existing crisis in capital should make 
 abundantly clear is that there is no holy writ which says United 
 States capital must go to Latin America. The plain truth of the 
 matter is that United States investment capital does not need Latin 
 America. 
 
 The American economy still exerts the first claim on the com- 
 petitive demands for the investment dollar. Most American com- 
 panies are more deeply committed to supplying capital funds for 
 product development and improvement, or in being associated with 
 the glamour of a shot to the moon, than with the discovery of in- 
 vestment opportunities in Latin America. 
 
 Lenin's celebrated dictum— now a universal article of Communist 
 faith— that finance-capital must invest in the underdeveloped lands 
 because it has no other place to go simply does not hold water. The 
 European Common Market— as was previously noted— has attracted 
 almost as much new United States investment since the mid-fifties 
 as our entire existing investment in Latin America. Today, to para- 
 phrase from the Communist Manifesto, a specter is haunting com- 
 munism—the specter of the European Common Market. 
 
 If Latin America really wants American private capital, its own 
 
142 The Caribbean: Venezuelan Development 
 
 private capital has to stand up and be counted. It is immoral 
 for Latin America's businessmen to expect United States business 
 to assume the risks which they themselves are unwilling to take. 
 
 Latin America is not as capital poor as it would have us believe. 
 There is now probably as much private Latin American capital 
 squirreled away in New York, Paris, London, and Zurich as the 
 Alliance for Progress proposes to export over the entire decade. 
 Until this refugee capital is repatriated, we are just whistling in 
 our teeth about a decade of development in Latin America. 
 
 In some major Latin American countries expatriated private 
 capital may have exceeded the total amount of United States 
 foreign aid. Nor can this vacuum conceivably be filled by foreign 
 aid when it is recalled that many of the Latin American countries 
 have sustained losses from the decline in commodity prices which 
 are two or three times as great as the amounts supplied through 
 public monies from the United States. 
 
 In recent months, some prominent United States and Latin 
 American leaders have sought to dismiss the problem of flight 
 capital or have defended its incidence. Dr. Felipe Herrera, Presi- 
 dent of the Inter-American Development Bank, believes that focus- 
 ing attention on fugitive capital "harms the standing of the hemi- 
 sphere abroad." 
 
 Do Latin America's leaders believe that it is politically realistic 
 for the President of the United States to continue to ask his fellow 
 citizens to help Latin America when Latin Americans themselves 
 have so little confidence in their own countries? Do Latin Ameri- 
 ca's leaders believe that it is politically realistic to expect the 
 Congress to continue to appropriate tax monies for the benefit of 
 Latin America when Latin Americans act like strangers in their 
 own lands? 
 
 The vast majority of the American people are weary with the 
 whole business of foreign aid. Nevertheless, Latin America holds 
 a unique place in their affections. The American people will 
 support their government's efforts to assist Latin America with 
 greater generosity than for any of the other poor lands of the 
 world. 
 
 One guaranteed way by which to make Americans indifferent to 
 Latin America's fate is for Latin America's leaders to tell us that 
 the migration of capital is a mere peccadillo which we ought not 
 to take seriously. 
 
 Private capitalism as a competing system with the state capitalism 
 
PRIVATE SECTOR OF THE ECONOMY 143 
 
 of the Soviet Union (for that is essentially what Soviet Commu- 
 nism is) cannot take itself for granted, least of all in a transitional 
 society. In Latin America, especially, private capitalism has to 
 justify itself, for it is on trial. It has to provide tangible evidence 
 that it can produce more at lower prices and that its cumulative 
 impact is good for the country and for the people. 
 
 Ask any baker's dozen of ordinary Latin Americans whom you 
 might encounter on the streets of Mexico City, Lima, Sao Paulo, 
 Buenos Aires, or any of the other urban conglomerations in Latin 
 America, what they think of the capitalist system in their country. 
 The answer will be a loud and resounding Bronx raspberry. The 
 reason is not hard to find: Latin American capitalism simply has 
 not delivered for the masses. And the propaganda of the extreme 
 left never lets up in driving home this fact. 
 
 A classic illustration of the point is the Mexican industrialization. 
 A mixed bag of public and private investment, it has by all odds 
 been spectacular. Between 1945 and 1957, Mexico doubled its 
 Gross National Product. No other Latin American country during 
 the same period was able to achieve that record. In this same 
 period per capita production increased 44 per cent. In the United 
 States it was 6.5 per cent. 
 
 Yet with this remarkable rate of growth the Mexican people 
 are not any better off than they were fifteen years ago. A report of 
 the United States Department of Commerce states: "There appears 
 to have been a considerable increase in the real per capita income 
 since 1939. However, most of the increase was in the form of 
 commercial and industrial profits, and large sectors of the popu- 
 lation apparently derived little if any benefit from the enlarged 
 national product." 
 
 The Mexican economist Manuel German Parra finds a greater 
 inequality in the distribution of income in 1955 than in 1940. 
 He comments that, ironically after forty-five years of struggle for 
 social justice by the Mexican Revolution, the distribution of in- 
 come in Mexico is so lopsided as to make the most conservative 
 British or United States capitalist blush. 
 
 If the Mexico of Don Adolfo Lopez Mateos is a far cry from the 
 Mexico of Don Porfirio Diaz (when it was "the mother of foreign- 
 ers and the stepmother of Mexicans") there is, nevertheless, a 
 deadly parallel. Don Porfirio's cientificos (that brilliant group 
 of young lawyers and economists who worshipped at the shrine of 
 Progress and ruled as benevolent despots) have been replaced after 
 
144 The Caribbean : Venezuelan Development 
 
 twenty years of industrialization by revolucionarios adinerados— 
 rich revolutionaries— who have siphoned off the lion's share of 
 the increase in national income, (hie revolucion! Que adelanto! 
 (Some revolution! Some progress!) 
 
 VII 
 
 Since that fateful evening in late October when President Ken- 
 nedy informed the world of America's determination to counter 
 the Soviet missile thrust into the Western Hemisphere there has 
 been discernible in Latin America a new climate, a different 
 ambiente. 
 
 American diplomacy had exerted itself— decisively, massively, 
 and masterly. Latin America was eager to follow— and it did. 
 Overnight, as it were, the turgid atmosphere full of recriminations 
 and bickerings, which had hung over the continent, has been re- 
 placed by a clear sky. 
 
 Dr. Castro is discredited as a social revolutionary. Today, he is 
 revealed as a paranoiac incendiary— an exporter of terror and de- 
 struction. His erstwhile admirers are disenchanted by the con- 
 firmation of Cuba's status as a Soviet lackey— a lackey, moreover, 
 which threatened to engulf the entire continent with a stockpile 
 of Soviet missiles. After almost $1 billion in economic aid from 
 the Soviet bloc, Cuba is a failure as a Communist showcase. 
 
 New opportunities beckon for American diplomacy and for 
 American business. May not this be the beginning of a new dawn 
 for United States investments in Latin America? May not this be the 
 decisive hour for United States business leadership to lead? Are 
 not the tides right for the launching of a Business Alliance for 
 Progress? 
 
 The embryonic Central American Common Market offers an un- 
 paralleled opportunity for United States business leadership to 
 make a spectacular contribution to modernization. It can do this 
 by organizing a series of mixed private-and-governmental ventures 
 to supply capital and consumer goods for a potentially viable re- 
 gional economy. West European, Canadian, United States, Japanese, 
 and Central American capital (both private and governmental) 
 could be mobilized. 
 
 Perhaps the most significant and far-reaching contribution— for 
 both the immediate Common Market undertaking and for the 
 future of United States investments throughout Latin America— 
 
PRIVATE SECTOR OF THE ECONOMY 145 
 
 would be for the coventurers to propose to and negotiate with the 
 Central American Common Market Authority a Charter of the 
 Rights, Duties, and Obligations of the Investors and of the respec- 
 tive governments. 
 
 The charter could spell out, among other things, that this inter- 
 national consortium did not intend to preserve its investment over 
 the indefinite future; and that its financial stake could be bought 
 out by local investors or governmental bodies. It could be made 
 crystal clear that the whole sweep of the idea was to light the fuse, 
 to detonate an explosion of economic growth— and then get out. 
 
 What is good for the Central American Common Market can 
 also be good for the larger Latin American Free Trade Association 
 (LAFTA). Latin America's best hope for economic progress lies in 
 the early development of these two regional markets. 
 
 In a world divided into enormous trading blocs, unless Latin 
 America's fragmented economies are regionally integrated, they are 
 doomed to permanent stagnation. 
 
 It cannot be emphasized too often that for its own psychological 
 sake and for its own political future, Latin America must think 
 and act as a continent. A century and a half of Balkanization is 
 enough! 
 
 Latin America's forced-draft industrialization has of necessity 
 created artificial, hothouse industries. They are sustained by their 
 ability to exact high prices for their products. Their underpinning 
 depends upon protective tariffs and other import restrictions. Much 
 of Latin America's industry would collapse at the first hot breath 
 of technological and price competition— the missing ingredients in 
 Latin America's economy. 
 
 Regional integration now offers the unique opportunity for 
 industrial rationalization. Regional integration can provide the 
 elbow room for North American, European, and Japanese tech- 
 nology, distribution skills, and consumer financing to accelerate 
 economic growth. This can be accomplished initially by reorganiz- 
 ing and consolidating those existing enterprises whose technology 
 is largely obsolete, whose handling of materials is costly and waste- 
 ful and whose business efficiency leaves much to be desired. 
 
 The experience of the United States' common market and the 
 emergent European Common Market demonstrates that the small 
 unit cannot compete effectively. Big consumer markets require 
 big businesses with strong engineering, manufacturing, and financial 
 resources. 
 
146 The Caribbean: Venezuelan Development 
 
 The business elite of Latin America have to make a choice: 
 either they will remain as big frogs in small ponds— very rich frogs, 
 I might add, but not to be taken seriously in the Industrial North. 
 Or, they can begin to think and act like centers of industrial power, 
 to be accepted as peers among peers by the industrial power centers 
 of the North. 
 
 If Latin America expects to become an industrial power, its in- 
 dustries will have to compete in the world markets. In these 
 markets, Latin American business can compete successfully only 
 through large industrial complexes. 
 
 The sweep of history may bypass LAFTA if it fritters away a 
 decade on conventional tariff jockeying to the neglect of regional 
 consolidation and merger of industries; and if it fails to supply 
 imaginatively conceived regional mechanisms to support economic 
 integration. 
 
 I venture to suggest that there may never again be present a more 
 propitious moment for the LAFTA countries to re-evaluate whether 
 its regional structure may not be too unwieldy, and whether initially 
 a more simplified series of regional groupings would not be more 
 manageable for trade and political administration. 
 
 Latin America is at an historic moment of truth: unless its 
 governing and business elite heed Macauley's injunction to reform 
 if you would preserve, they might just as well sign their own death 
 warrants. For comes the revolution there will be precious few of 
 this class who will hold a safe-conduct pass. 
 
 A democratic capitalism, which is part of the mainstream of the 
 twentieth century, can strike a lethal blow at Latin America's real 
 enemy: the people's lack of hope and the bitter despair which con- 
 sumes their hearts. A twentieth-century democratic capitalism can 
 offer to the people of Latin America an alternative beyond the 
 capabilities of Marxism: a stake in the future under freedom. If 
 a revitalized Alliance for Progress and the hemisphere's enlightened 
 business leaders will now act with reassuring swiftness, it could be 
 the beginning of a new era in the New World. 
 
Armando Branger: Venezuelan business and 
 
 THE businessmen 
 
 VJn behalf of the Federation of Chambers and Associa- 
 tions of Commerce and Production, I would like to say that it is 
 an honor and a privilege to participate in this conference as repre- 
 sentative of our organization. The Fedecam, as we call it in Vene- 
 zuela, is pledged to the principles of private enterprise, but at the 
 same time it recognizes that there are certain basic functions in the 
 shaping of the economy of a developing country that can be carried 
 out only by government. 
 
 Consequently, Fedecam welcomes the opportunity to take part 
 in this discussion where the points of view of both private enterprise 
 and the state are set forth. It is our belief that such free exchanges 
 of opinions can lead to greater mutual understanding and lay the 
 foundations for fruitful cooperation in the common task that lies 
 ahead of us. 
 
 We businessmen do not believe that there are two completely 
 different and mutually exclusive classes of men in Venezuela, that 
 is to say, on the one hand, a group dedicated to the material and 
 spiritual advancement of all Venezuelans, and, on the other, a self- 
 centered group concerned only with the protection and aggrandize- 
 ment of its own vested interests. Like any other Venezuelans, we 
 businessmen are vitally interested in the nation's welfare— its spirit, 
 its essence, and its substance— and we also share the urgent feeling 
 
 147 
 
148 The Caribbean : Venezuelan Development 
 
 of the need for improvement and for contributing the best of our 
 ability and skills to the country's progress. 
 
 Because of this feeling, we cannot regard with indifference the 
 belief that we are completely and exclusively given over to our own 
 interests, while the love of country and concern for the welfare of 
 its inhabitants are the sole concern of others. The farm entre- 
 preneur, who knows agriculture's instability at first hand; the in- 
 dustrialist, who applies all his skills to creative effort; the banker, 
 who bends his effort to increasing the volume of financial resources 
 which are the life blood of the economy; the merchant, who seeks 
 everlastingly to improve his services; and the contribution of the 
 trade associations of businessmen toward solution of national 
 problems— all these men and organizations render a labor that is 
 just as important to the country as that of the politicians, workers, 
 scientists, educators, and intellectuals. 
 
 The fundamental importance of the businessman's contribution 
 is placed in clear perspective by the entity which coordinates it, 
 the Federation of Chambers. Our organization directs its per- 
 manent effort into constructive channels. Our work programs deal 
 with the over-all aspects of the economy. We seek to give our 
 activities a unified nature, designed to foster in the businessman 
 the recognition of his responsibility as a member of the community 
 and of his obligation to cooperate with other groups in the solution 
 of the country's problems. Thus, the agenda for our annual meet- 
 ings regularly feature questions of major importance such as the 
 direction our economic growth is to take, the subject of industrial 
 development, agricultural development, the improvement of busi- 
 ness and services, and the perfection of government operations with 
 respect to economic policy, financial measures, and administrative 
 structure. 
 
 Discussion of the trend of Venezuela's economic development 
 becomes inevitable for those of us who are concerned with its 
 future, in view of the adverse experience of recent years. We feel 
 it is significant, for example, that two years after the economic 
 recession set in, we are still arguing about its causes. 
 
 There can be no doubt that the most important single factor in 
 this situation has been the general ignorance, following the over- 
 throw of the previous regime, of the true situation of our public 
 finances, of the true economy of production, and of monetary 
 policy, an ignorance which obviously prevented the adoption of 
 effective solutions. 
 
PRIVATE SECTOR OF THE ECONOMY 149 
 
 II 
 
 The approach to economic problems in Venezuela has been 
 that o£ trial and error in both the public and the private sector; a 
 method which, by its nature, leads only to superficial and very cost- 
 ly results. The proper alternative would have been to analyze 
 events objectively, with valid economic criteria and with no pre- 
 conceived prejudices and, on the basis of a complete examination 
 of the facts, to take effective steps to organize the economy. 
 
 In Venezuela, we have become engrossed in a sterile discussion 
 from which we have yet to emerge. There is one school of economic 
 thought which holds that the troubles of our economy arise from 
 its structure, from the fact that 20 per cent of national income, 28 
 per cent of the GNP, 60 percent of government revenues, and 
 90 per cent of foreign exchange come from one industry alone. This 
 situation demonstrates the monoproducer nature of the economy 
 as well as our high degree of dependence on imports. It also in- 
 creases our economic vulnerability, since the operation and sta- 
 bility of the economy depend on the degree to which we can main- 
 tain our foreign transactions satisfactorily, not only in terms of 
 trade but also in the movement of capital. 
 
 In support of this thesis, its advocates point out that during the 
 last decade the balance of our trade in tangible goods and services 
 has been consistently unfavorable and that this has been com- 
 pensated for only by a consistently favorable balance in capital 
 movement. It is maintained that the country has consumed more 
 than it produced and that it has been possible to boast a favorable 
 balance in our foreign commercial relations only because of in- 
 creased foreign investment. 
 
 The second school of thought holds that Venezuela's problem is 
 not structural, but due to passing circumstances. This school states 
 that all developing countries must supplement their own savings 
 by foreign capital in order to provide sufficient resources to expand 
 production and to achieve a satisfactory level of economic inde- 
 pendence for future growth. Because of this, it is further held, 
 in this type of economy the imbalance in trade and services cannot 
 be interpreted basically as a structural deficiency, unless the dif- 
 ference is so great that over the long term it is impossible to achieve 
 the compensatory mechanism which will avoid the danger of jeop- 
 ardizing national sovereignty. The advocates of this thesis contend 
 that Venezuela's economic situation in recent years can be reduced 
 
150 The Caribbean: Venezuelan Development 
 
 to a simple temporary imbalance due to the decline in the favorable 
 capital movement balance. 
 
 The analysis of the two postulates leads to the conclusion that 
 both are partially correct. Venezuela's economic problem is struc- 
 tural in the sense that the nation's productive capacity must be 
 diversified and expanded as the only means of solving the complex 
 of social evils arising from growing unemployment. This, of course, 
 would lessen our foreign dependence and would tend to improve 
 the balance between our economy and those of other countries. 
 But, Venezuela's problem is due also to temporary circumstances in 
 the sense that a whole complex of political, labor, social, and ad- 
 ministrative factors, plus the ramifications of current hemispheric 
 conditions, have made their influence felt, leading to an erosion of 
 confidence in business prospects, a decrease in the inflow of capital, 
 and a corresponding increase in capital flight. 
 
 This analysis, which attributes the economic recession of recent 
 years partially to the structural factor and partially to temporary 
 circumstances, states the problem in the following terms: the vigor 
 and strength of Venezuela's economy are in direct ratio to the 
 success of the effort to correct the monoproducer nature of the 
 economy through diversification and geographic expansion of eco- 
 nomic activities. This process, in turn, is in direct ratio to the de- 
 gree of fiscal and exchange stability, which is essential to growth 
 in the volume and variety of economic activity. Without stability, 
 economic development is slow and may even come to a halt. 
 
 We believe that most of those who give careful thought to the 
 trend of our economic development will accept this eclectic position, 
 even if giving more emphasis to one factor than another. There 
 is much greater difference of opinion on the economic strategy that 
 should be followed for the optimum employment of the resources 
 of the economy toward the desired goal of development. 
 
 There is a substantial body of thought in Venezuela favoring 
 state economic interventionism. No one would deny, in absolute 
 terms, either the right or the obligation of the state to intervene 
 temporarily in certain specific areas. By the same token, it is in- 
 admissible that, in the name of that right and duty, the whole 
 fabric of our decentralized economy of capitalist type should be dis- 
 jointed, for the economy is based on private control of the means 
 of production and the principal sustenance of the economy comes 
 from production united under that control. The advocates of all- 
 out state intervention do not seek moderate and judicious govern- 
 
PRIVATE SECTOR OF THE ECONOMY 151 
 
 merit participation, but the establishment of centralized economic 
 power which, in the long term, will destroy the existing economic 
 order and replace it with a socialist system. 
 
 The advocacy of this theory by certain political groups in Vene- 
 zuela is a matter of deep concern for business. There is an in- 
 difference, indeed, almost outright hostility, to private initiative 
 and its efforts to increase national income and wealth. This sector 
 makes unfounded accusations against business and increasingly 
 demands official intervention in private enterprise operations. 
 
 As we all know, Venezuela's economy enjoys a high annual 
 growth rate. During the last decade, the GNP has grown at a rate 
 of more than 80 per cent, an exceptional rate for countries with 
 an economic structure like ours. However, this development has 
 been inadequate to meet the employment needs of a population 
 which is also growing rapidly. The country faces the problems of 
 extensive unemployment in its cities, of a large proportion of the 
 population engaged in occupations of very low productivity, and 
 of the fact that 80,000 youths enter the work force each year, 
 looking for their first jobs. 
 
 This problem of the lack of job opportunities is becoming 
 steadily worse because of insufficient economic development. The 
 fundamental problem of Venezuela's economy is to maintain and 
 increase the high growth rate of GNP and at the same time create 
 the conditions necessary for uniform growth in all sectors of 
 economic activity so that each will complement the other and make 
 possible sustained growth of the economy as a whole. 
 
 We need development in which manufacturing will become an 
 integrating force; in which agriculture will raise its efficiency and 
 productivity, guaranteeing greater per capita income in that sector 
 and lifting great masses of impoverished peasants out of the misery 
 of underconsumption; in which business activity in general will 
 improve its specific functions of distribution; in which all the latent 
 resources of our great natural wealth will be utilized for domestic 
 consumption and for export; which will guarantee stability in 
 foreign payments so we can import the goods needed to renovate 
 and expand our plant and equipment; which will take maximum 
 advantage of the wealth generated by the oil industry— in sum, 
 a diversified and integral development that will provide employ- 
 ment for all and that will meet adequately the growing demands of 
 the future. 
 
 This development will not come to us on the basis of philosophic 
 
152 The Caribbean : Venezuelan Development 
 
 speculation and incessant political strife. Development comes only 
 from the surplus of production over consumption. This surplus 
 increases in importance as production volume grows, and the only 
 way of insuring a high level of production is through sustained 
 effort and disciplined application on the part of labor and man- 
 agement. No case is known of a country that prospered solely on 
 the basis of ideological abstractions. Ideas serve as a means of 
 guidance, but they are not ends in themselves. The time has come 
 for us to speak less and do more in Venezuela, and when we turn 
 our minds to thinking, we should not conduct the exercise in the 
 rigidly controlled channels established by ironbound ideologies, 
 but in such a way as to determine what is indispensable for a 
 climate of understanding in which we can all develop our creative 
 ability in behalf of national development. 
 
 /// 
 
 Much has been said in recent years of the extraordinary concen- 
 tration of wealth and of the need to change this situation. Toward 
 this end, some people have demanded increasing state intervention 
 to the prejudice of private enterprise. Others have proposed a 
 wide variety of measures, designed, in their own words, to take 
 away from those that have and to give to those that have not. In 
 Venezuela, as in any country, an effort must be made to insure 
 that the income from economic activity is spread to all areas of the 
 country. But in the pursuit of this equitable distribution of income 
 we must not confuse the whole with its parts. In a decentralized 
 economy where the productive function is carried out principally 
 by private enterprise, the only way of obtaining adequate income 
 is through creation of the facilities which permit those enterprises 
 to prosper so that they can guarantee employment and provide a 
 greater volume of goods and services to the consuming public. 
 
 When one speaks of the need of economic growth, one is saying 
 implicitly that it is essential to expand the means of production 
 which, taken together, constitute the capital base of the nation. 
 If this capital base were to be distributed among the entire popu- 
 lation, each one would receive a portion so small that it would 
 do almost nothing to meet his individual needs. Rather than dis- 
 tribution, it is a question of creation of new wealth which will 
 generate income; this, in turn, as it is distributed through the 
 market mechanism, will give purchasing power to the maximum 
 number of Venezuelans. In terms of number of activities and geo- 
 
PRIVATE SECTOR OF THE ECONOMY 153 
 
 graphic extension, the thesis of economic growth and diversification 
 means simply the expansion of the sources of generation and dis- 
 tribution of income. 
 
 In the same order of ideas, the frequent claim that the economic 
 role of the state should be strengthened in detriment to private 
 enterprise does not stand up to economic analysis, and can be 
 justified only on the grounds of substituting socialism for our pres- 
 ent system. The Venezuelan government, like the "coordinating 
 entity" of any country, must concern itself with the development 
 of many general services which are essential to economic growth 
 and which, because of their nature, cannot be undertaken by private 
 enterprise. Among these services are: the creation of the social over- 
 head capital (infrastructure) indispensable for economic develop- 
 ment, such as highways, ports, airports, public health buildings, 
 schools, communications facilities, irrigation, etc. The state must 
 develop programs designed to improve the attitudes and produc- 
 tivity of the people, through education and training; it must con- 
 cern itself with public health through improvement of environ- 
 ment and preventive and curative medicine. In short, the state 
 has a wide variety of functions which demand its permanent atten- 
 tion and which are numerous enough to absorb its total adminis- 
 trative and financial resources. Any rational program of work 
 distribution must reserve the productive function to the entity best 
 equipped to handle it, which is private enterprise. 
 
 In line with this thinking, the state should intervene in economic 
 activity only in cases where it is absolutely necessary to introduce 
 improvements in production, distribution, and consumption rela- 
 tionships to eliminate obstacles that jeopardize the progress of 
 private initiative. When it does intervene, the state should not 
 become a monopoly which hamstrings the free enterprise principle 
 and which, by its nature, gives rise to inefficiency and becomes a 
 bottomless hole into which public funds are poured. 
 
 We have in Venezuela a state-owned steel plant and petro- 
 chemical industry whose avowed purpose is to utilize the country's 
 basic raw materials, reduce our dependence on foreign countries, 
 foster the development of industries using the materials, and avoid 
 a private monopoly which might compromise productive activity 
 in these fields. Without going into the soundness of these reasons, 
 we would point out that the magnitude of the resources involved 
 and the great possibilities of their proper utilization raise a vexing 
 question as to their optimum yield. 
 
154 The Caribbean : Venezuelan Development 
 
 For many years Venezuela has been one of the principal oil and 
 iron ore exporting countries of the world. In Latin America and 
 in other areas, a strong effort is being made today to develop steel 
 and petrochemical industries. If we do not step up our efforts to 
 industrialize these raw materials, we will be condemning the country 
 to the role of simple raw material supplier and eliminating it from 
 the more attractive processing field. In other words, we will be 
 exporting to other countries the means of development when we 
 hand over to them our raw materials, in detriment to our own 
 progress. This brings us to the question of the need for stimulating 
 the progress of this industrialization, which demands a large volume 
 of capital. Given these facts, the following questions arise: Are we 
 aware of the responsibilities inherent in this situation? Is the 
 government by itself in a position to take on this tremendous job 
 in view of the urgent development needs of other sectors of national 
 life? The answer is: No. This requires that we give very careful 
 thought to the need for some sort of combination of public and 
 private action which, without jeopardizing national sovereignty, will 
 make the development of the industrial complexes in these two re- 
 sources feasible in the necessary magnitude and variety. 
 
 IV 
 
 Turning to another area, the world is witnessing the emergence 
 of economic blocs, made up of countries that coordinate their 
 production on the basis of the principle of division of labor and 
 large-scale economic operations. These blocs are prospering not 
 only because of strictly economic but because of ideological de- 
 fense and material security reasons as well. The idea is taking hold 
 in Latin America, and although Venezuela has remained aloof to 
 the present, economic factors and simple geography eventually will 
 draw us in. Consequently, when we talk of national economic de- 
 velopment, we must bear in mind the demands that are implicit in 
 the process of economic integration of the region to which we belong 
 because of geography, history, and political defense. 
 
 As is known, there are two economic systems in the world with 
 clearly defined attributes of spirit, essence, and substance. One of 
 these is the decentralized kind in which economic activity is carried 
 on through private enterprise whose basic aim is to produce 
 efficiently in order to raise the living standard of those who partici- 
 pate in productive activity. In this respect, the virtue of the capi- 
 
PRIVATE SECTOR OF THE ECONOMY 155 
 
 talist system is in direct ratio to the businessman's ability to im- 
 prove his operation; he is the one who has the strategic function 
 of combining the factors of production according to his plan, the 
 state of technology, and the organization of the market. He also 
 distributes the profit among those who possess the factors of pro- 
 duction: capital, land, labor, and management. When he exer- 
 cises his function properly, the businessman decides what to pro- 
 duce, how much to produce, and how to produce to satisfy the 
 demands of the market. 
 
 The comprehension of these facts requires one to point out 
 that the progress of a country is linked directly to the ability of 
 its businessmen; this places on them the obligation of developing 
 a conscientious desire to excel and to improve ceaselessly. They 
 must be fully aware that both the material goods they handle and 
 their own managerial skill must fulfill a social role, in the sense 
 of rational utilization of their production resources so as to obtain 
 the highest possible level of production which is converted ulti- 
 mately into a better standard of living for the entire community. 
 However, that responsibility exists only to the point where factors 
 alien to the economic system intrude and disrupt the functioning 
 of free enterprise in the market economy. The shortcomings of 
 Venezuela's economy are the result of frequent interferences with 
 the mechanism and basic factors of the economic system and the 
 laws that govern it, rather than poor management by businessmen. 
 
 V 
 
 Venezuela is a young country with a fortunate history. During 
 the past century, the country underwent a profound social revolu- 
 tion which left as part of its heritage a deep feeling of equali- 
 tarianism among her people. 
 
 Our oil development has provided a very large quantity of eco- 
 nomic resources in a very short time. This has made possible a 
 pattern of distribution of wealth among a large number of small 
 businessmen. Venezuela is not faced with the problem of an all- 
 absorbing oligarchy; she does have, on the contrary, a large nucleus 
 of businessmen, equipped with a liberal and alert point of view. 
 
 Venezuela has an over-all business organization which embraces 
 all business activities, even though there are conflicting interests 
 among many of them. The liberal background of her businessmen 
 has made this possible because, by their social background and 
 
156 The Caribbean: Venezuelan Development 
 
 historic legacy, they think as members of a community and not as 
 cogs in a machine. 
 
 The prevalence of this liberal point of view is reflected in the 
 action of Venezuela's business organizations, which make up the 
 membership of the Fedecam. They participate in and sponsor meet- 
 ings which bring the business man into direct contact with other 
 sectors of our national life— educational, scientific, cultural, and 
 professional. These meetings provide a means of bringing the 
 business community together with other groups that are essential 
 factors in the growth and development of Venezuela. 
 
 By the same token, members of our board of directors have taken 
 part in working committees that grapple with national problems. 
 The board also makes known its position, which reflects the point 
 of view of the membership, on all public issues through carefully 
 documented public statements. This sustained task of formulating 
 basic principles, the constant reiteration of these principles, our 
 presence in the sense of vigilance on public issues and the defense 
 of the interests of the business community within the framework of 
 the higher interests of the nation, these are the chief functions of 
 our organization. 
 
Gustavo J. Vollmer: the role of the private 
 
 VENEZUELAN INVESTOR 
 
 X SHOULD LIKE to approach this subject in terms of the in- 
 vestor's attitude towards the economic and social problems that 
 arise from the process of development, and I feel that it will be 
 interesting for you to know some of the questions which we are 
 asking ourselves in this respect. Let me begin by reviewing some 
 of the broader aspects of Venezuela's economic past, to determine 
 its effects on our attitudes and reactions. 
 
 From colonial times until the 1930's, the economy of Venezuela 
 was predominantly agricultural. Even at the end of that decade, 
 65 per cent^ of the population was rural. Throughout this long 
 period, the investor operated basically in the field of agriculture, 
 and his role was limited to the sphere of traditional estate man- 
 agement. In the cities, economic activity was essentially commercial, 
 but even this was primitive in its methods. The tools of a dynamic 
 economy were not available, and the efforts made in the industrial 
 sector were akin to handicraft. 
 
 The economic transformation of the country started during 
 World War II at the time that the petroleum industry acquired an 
 enormous preponderance in the economy of Venezuela. In this 
 period new factories sprang up— cement, sugar, textiles, food in- 
 
 1. National Census for 1940. 
 
 157 
 
158 The Caribbean : Venezuelan Development 
 
 dustries, rubber— and new horizons opened up to the entrepreneur- 
 horizons which no longer permitted a passive attitude towards in- 
 vestment. The successful operation of the new factories required 
 daily contact with modern techniques— automation, modern ma- 
 chinery, technical skills, and production planning. However, in- 
 dustrialists were not the only type of investors to develop from the 
 petroleum boom. The resources generated by oil produced an un- 
 precedented increase in other fields of activity— commerce, con- 
 struction, and financial operations. Entrepreneurs in these fields 
 soon geared their thinking in terms of investments of extremely 
 rapid turnover and high yields. 
 
 These changes in the economic life of the country were accom- 
 panied by changes in other aspects of the country as well. Cities 
 mushroomed and were remodeled, and closer contact with the high 
 living standards of more developed countries led to desires for 
 similar advantages. 
 
 // 
 
 The start of the petroleum age in Venezuela manifested itself 
 in a tremendous shakeup in the economic basis of the nation. For- 
 eign capital built up a highly efficient oil industry in Venezuela, 
 endowed with the most modern equipment and advanced tech- 
 niques, and thus placed one of the world's most productive activities 
 in the midst of a slow-moving rural economy. This situation was to 
 have a profound influence on the economic and social develop- 
 ment of the country. 
 
 The effect of the enormous productivity of the petroleum industry 
 on the rest of the economy was very limited. On the other hand, the 
 availability of foreign exchange produced by petroleum did reach 
 the entire economy and, as a result, the different productive sectors 
 were free to expand and develop without due consideration to what 
 generally is one of the most important problems of developing 
 countries: the lack of hard currency. This caused Venezuela's ca- 
 pacity to import to grow much more rapidly than employment op- 
 portunities and the internal market. In the period 1950-59, the 
 capacity to import rose 136 per cent while employment increased 
 only 37 per cent.^ 
 
 Thus a serious imbalance in the national economy appeared: 
 
 2. Annual reports of the Central Bank of Venezuela, 1950-1959. 
 
PRIVATE SECTOR OF THE ECONOMY 159 
 
 the increasing availability of foreign exchange could not be ade- 
 quately used due to the limitations of the internal market. The 
 natural result was that the purchasing power of the bolivar was 
 greater abroad than at home. In addition, this external overvalua- 
 tion resulted in Venezuelan salaries (in terms of money) exceeding 
 those of countries with high levels of productivity. Goods produced 
 in these countries had a favorable competitive edge in the Vene- 
 zuelan market and national consumption became oriented towards 
 imported goods. Our consumers demanded and could afford to 
 pay for the best quality and the most modern and varied products 
 available in the great industrial centers of the world. 
 
 This dependence on imports was a serious obstacle to the in- 
 dustrial development of the country. Local manufacturers could 
 compete only when the national industry was adequately protected, 
 which meant high customs duties, import licenses, and quotas. 
 Widespread adoption of these measures, however, has been limited 
 to the last few years, mainly prompted by the drastic reductions of 
 our gold and dollar reserves. 
 
 The benefits from the exploitation of oil were translated into 
 ever-increasing income for the national treasury since, under laws 
 dating from colonial times, the state is the owner of the subsoil and, 
 consequently, the direct recipient of the revenue derived from it. 
 For this reason the state has come to be the largest and most im- 
 portant investor in the country, influencing and molding economic 
 activity according to the channels through which it directs public 
 investment. 
 
 It should be noted that an important part of this income has 
 been used by the government in infrastructure projects which have 
 provided the country with a sound basic investment, principally 
 in power and public highways. 
 
 /// 
 
 As a result of the political changes in 1958, the financial situa- 
 tion of the country was reassessed, and it became evident that the 
 previous government had acquired enormous obligations which were 
 not included in the budgets and were unknown to the public, and 
 in fact, even to the Treasury itself. The difficulties in balancing the 
 budget and the adverse position of the balance of payments made 
 it necessary to adopt new financial measures, including an alteration 
 of the currency's exchange rate. The bolivar-dollar rate which had 
 
160 The Caribbean: Venezuelan Development 
 
 been stable at 3.35 for 20 years rose to 4.54, and with very few ex- 
 ceptions all imports are now made at 4.54 bolivars per dollar. 
 
 While it is true that this measure has created some disorder in 
 Venezuelan financial circles, the new exchange rate is providing a 
 significant stimulus for domestic production by enabling Vene- 
 zuelan goods to be more competitive through the elimination of 
 what was in effect an import subsidy. 
 
 It is important to note that the 35 per cent increase in the ex- 
 change rate has not produced a significant increase in internal 
 prices. From November, 1960, when the first exchange control be- 
 came effective, until July, 1962, the general wholesale price index 
 rose only 7 per cent which is undoubtedly moderate, especially 
 when compared to the tendency of the price indices in other Latin 
 American countries.^ 
 
 These are some of the conditions which have created the present 
 economic structure of Venezuela. The rapid growth which the 
 country has experienced produced such extreme contrasts that, in 
 truth, we should speak of "The Venezuelas." Side by side with 
 an industry which uses electronic computers to control produc- 
 tion there exists an agriculture in which even the proper use of 
 fertilizers is often unknown. The productive picture presents in- 
 consistencies. For example, while the petroleum industry employs 
 only 2 per cent of the labor force to produce a quarter of the 
 national income, 43 per cent of the population is engaged in agri- 
 culture producing only one tenth of that income.* 
 
 Although the average annual per capita income is $800,^ at 
 least a third of the population does not have sufficient means to 
 form part of the consuming market. While the Gross National 
 Product exceeds $6 billion, the productive activities cannot employ 
 the available labor force, and unemployment has reached 13.6 
 per cent.^ Besides this, it is estimated that over the next ten years 
 the country must provide new employment opportunities for 
 70,000 additional workers every year^ due to the population growth, 
 now at the rate of 3% per cent per annum. 
 
 The net result of these inconsistencies in the Venezuelan econ- 
 
 3. 1961 Annual report of the Central Bank of Venezuela; Monthly bulletins 
 of the Central Bank for 1962; and United Nations Statistical Yearbook, 1961. 
 
 4. Annual report of the Central Bank of Venezuela, 1961. 
 
 5. Idem. 
 
 6. Office of Planning and Coordination of the Presidency of the Republic. 
 
 7. Idem. 
 
PRIVATE SECTOR OF THE ECONOMY 161 
 
 omy has been social unrest which shows up in the form of political 
 pressure. Low levels of education, housing, and sanitation, and a 
 general suspicion of the ability of the capitalistic system to solve 
 these problems have aggravated this condition. 
 
 IV 
 
 This then is the situation which confronts the Venezuelan in- 
 vestor: a nation ready for intensive industrial development; a na- 
 tion rich in basic natural resources— oil, iron ore, hydroelectric 
 power, and fertile soil; a labor force that must be employed; a 
 transient balance of payments problem which has caused a realistic 
 devaluation favoring local industry; this picture is highly attrac- 
 tive economically. To invest in Venezuela today means to become 
 associated with a new and growing economy with multiple oppor- 
 tunities. Investing in Venezuela means taking advantage of the 
 protection being offered to local industry; it means counting on 
 the backing of a national product which represents 11.6 per cent 
 of the value of all goods and services produced in Latin America;® 
 it means investing in a market which will grow rapidly as a result 
 not only of the population increase, but also of the incorporation 
 of low income groups into the consumer market. 
 
 No investor, however, can ignore that the existence of social prob- 
 lems is a threat to the safety of investment and that only to the 
 extent that the wide differences in standards of living are overcome, 
 will stability be added to the purely financial attraction of invest- 
 ment. Awareness of this problem makes one thing imperative: 
 private investment must proceed along the lines which, while pro- 
 viding an adequate rate of return, will at the same time contribute 
 to the solution of the social problems of the nation. 
 
 The investor must never forget that his basic function of making 
 capital grow is inseparably tied to the social improvement of the 
 nation. He must always be aware of his obligation to raise the 
 living standards of his workers, to employ his capital for the 
 maximum good of the greatest number of his fellow citizens, to 
 think in terms of more equal distribution of wealth. To accom- 
 plish these objectives, the Venezuelan investor must do everything 
 in his power to increase the capital available for development, 
 
 8. On the basis of calculations made from statistics presented by the Organi- 
 zation of American States, in its report on the Economic and Social Conditions 
 in Latin America for 1961. 
 
162 The Caribbean : Venezuelan Development 
 
 foster the extension of education, and take a leading part in awaken- 
 ing the people to the obligations of the individual in a democracy. 
 
 This situation presents a challenge to the capacity, the energy, and 
 the vision of the Venezuelan investor— a challenge made all the 
 more difficult by the fact that the Venezuelan government plays a 
 predominant role in the economic life of the country. 
 
 It is necessary, then, that the Venezuelan investor have a clear 
 and precise understanding of today's situation so that he may play 
 a positive role in the economic orientation and development of the 
 country. If previously we limited ourselves to contributing to the 
 expansion of the economy, now we must be determined to influence 
 this expansion. If previously we limited ourselves to understanding 
 social problems, now we must make it our business to see that 
 schools, hospitals, roads, sanitation, and housing are improved. If 
 previously we were content to employ gainfully our available capi- 
 tal, now we must expand our local capital markets and seek out 
 joint ventures to bring new foreign capital into the industrial de- 
 velopment of the country. 
 
 In an economy where the principal source of capital is the 
 national government, the obligation to promote and defend the 
 free enterprise system falls squarely on the private investor. If he 
 is convinced, as I am, that this system is the only road to dynamic 
 economic development which at the same time combines freedom 
 of opportunity with justice and stability, he must use all his efforts 
 to provide working examples of his convictions. 
 
 The challenging role of the Venezuelan investor is part capitalist, 
 part social worker, part crusader, part educator. I invite foreign 
 investors to join us in bringing about the resounding triumph of 
 free enterprise in Venezuela. Let us meet the challenge together. 
 
15 
 
 IT 
 
 John F. Gallagher: the role of private foreign 
 
 INVESTMENT 
 
 X HE IMPORTANCE of the familiar— those aspects of our exis- 
 tence that are frequently seen in our daily activities— is often over- 
 looked or deprecated as we face the pressure of the problem-solving 
 in our responsibilities for "making a living." 
 
 As a retail merchant, I have often walked through stores, seeing 
 colors and fabrics and signs, gathering impressions. But, if I were 
 really to see what was behind the impressions, I would have to 
 stop and look and think and try to understand. 
 
 So, in the knowledge that much of what I am going to say is 
 "old news" to many of you, but with the belief that there is great 
 value in occasionally reviewing facts and circumstances, I should 
 like to mention some of the details of what foreign investment is, 
 what it has done, and what it is doing in Venezuela as I understand 
 it based on my several years of living and working in this great 
 country. 
 
 At the Punta del Este meeting, Venezuela and the other member 
 nations of the Organization of American States pledged themselves 
 "to stimulate private enterprise in order to encourage the develop- 
 ment of Latin American countries at a rate which will help them 
 to provide jobs for their growing populations, to eliminate unem- 
 ployment, and to take their place among the modern industrialized 
 nations of the world." 
 
 163 
 
1 64 The Caribbean : Venezuelan Development 
 
 It was prescribed at that meeting that national development pro- 
 grams should incorporate the "promotion through appropriate 
 measures of conditions that will encourage the flow of investments 
 and help to increase the capital resources of participating 
 countries." 
 
 In Venezuela, as in other developing countries, there are more 
 things to do than there is money to do them with. Money carries 
 a price tag— it is a commodity. It goes where it is most needed, 
 where it is welcomed, and where the returns are the greatest. Money 
 has to be paid for. Government loans, a frequently considered 
 source of capital, must be paid for in interest charges and in the 
 eventual repatriation of the entire capital. These loans are fre- 
 quently considered to have political implications. Private bond 
 issues and direct loans from financial institutions are another im- 
 portant source of capital. This type of capital also must be repaid 
 in full and carries interest charges. In addition, such funds usually 
 can be obtained only when substantial collateral is offered as 
 security. 
 
 The only kind of money with which I am familiar that does not 
 require interest payments, regardless of the profitability of the en- 
 terprise, and that remains where it has been sent on a permanent 
 basis, is risk or venture capital. Much of the economic growth of 
 Venezuela has been as a direct result of foreign risk capital, largely 
 originating in the United States, that has entered the country during 
 the past forty years. It is difficult to visualize how Venezuela could 
 be producing and selling more than 3 million barrels of oil per 
 day if it had not been for the extremely large amounts of risk 
 capital invested in that country by the international oil companies. 
 And it would be equally difficult to understand how more than 15 
 million tons of iron ore per year could be mined and marketed, or 
 to believe that industrial and commercial development could have 
 reached its present stage, with more than 300 United States com- 
 panies actively operating in the country, if it had not been for 
 this large capital investment. 
 
 Much has been said recently about joint ventures. I am sure that 
 they are desirable for the investment of risk capital. It would 
 certainly be undesirable, however, to insist on this type of invest- 
 ment procedure to the point where it would inhibit the flow of 
 new investments. The basic objective, of course, is to obtain and 
 to use to the maximum degree the risk capital available, whether 
 it be foreign or national. 
 
PRIVATE SECTOR OF THE ECONOMY 165 
 
 II 
 
 One o£ the best long-range methods of obtaining capital is 
 through savings. In this respect, you may be interested in the suc- 
 cess that Sears has had in introducing its savings and profit-sharing 
 pension program in Venezuela. The plan was started in February, 
 1953, with the participation of all eligible employees. The mem- 
 bers of the fund, as of July 31, 1962, had deposited a total of 
 Bs.2,383,751, representing deductions from their salaries. The com- 
 pany's contributions (a percentage of net profits) in these nine 
 years have amounted to Bs.4,434,965. The money from the fund has 
 been invested primarily in the stock of Sears Roebuck de Venezuela. 
 As a result, the Venezuelan employees of the company, through the 
 plan, now own 15 per cent of the stock of Sears de Venezuela. The 
 net worth of the plan is Bs. 8,206,448, which is three and one-half 
 times the amount contributed by our employees. The profit sharing 
 and the stock ownership permit each member of the plan to par- 
 ticipate in the growth of the company. Some of the members have 
 already accumulated approximately Bs. 80,000 in their accounts. I 
 mentioned earlier that the OAS countries agreed in Punta del Este 
 that it was necessary to "provide jobs for their growing popula- 
 tions." I mention this again at this time because I sometimes think 
 that we all too frequently think of capital as necessary to buy some 
 land, or machinery, but do not remember that it is really needed 
 to provide the "jobs for people." 
 
 Sears doesn't require as much capital, perhaps, as many other 
 types of business do, in the relationship of capital invested to 
 workers employed. However, for each person employed in Vene- 
 zuela, Sears had first to invest $11,245 (Bs.5 1,052). 
 
 Of equal or perhaps even greater importance to Venezuela than 
 money has been the contribution of private foreign investment in 
 the form of business organization, systems, procedures, techniques, 
 patents, and the continuing research that has made the company 
 successful in other countries. Sears, for example, has been able to 
 reduce the cost of distributing merchandise in Venezuela by em- 
 ploying the selling techniques common in our United States stores, 
 such as fixed prices, direct customer sales contact outside the store, 
 cash handling by sales personnel, and extension of consumer credit. 
 The technique employed in the United States of evaluating per- 
 formance by measuring sales per square foot of floor area utilized, 
 of personal sales in relation to payroll, of sales in ratio to adver- 
 
166 The Caribbean : Venezuelan Development 
 
 tising, serves as adequate means for establishing successful standards 
 of performance in Venezuela. The effective application of these 
 simple systems and techniques by Sears and their acceptance by 
 others has resulted in the establishment in Venezuela of a new and 
 respected profession— that of the retail salesman and the retail 
 executive. 
 
 This introduction of new techniques also often occurs in fields 
 outside the one in which the company has the most direct interest. 
 For example, Sears first placed an order in 1952 with a small com- 
 pany in Caracas for some men's underwear. At that time, the owner, 
 his wife, her brother, and seven other employees were making under- 
 wear on seven machines. The buyer was satisfied with the quality 
 of the product and the character of the owner. As a result, he began 
 to give guidance to the manufacturer in the creation of new styling; 
 he advised him on methods to be used and improved quality con- 
 trol. Arrangements were made, with Sears' assistance, for exten- 
 sion of credit terms to the manufacturer from banks and at the 
 source of his raw materials. On occasion. Sears has also given direct 
 financial assistance at times of peak capital requirements. 
 
 This guidance and assistance have permitted the manufacturer 
 to expand his line of products to the point where he is now manu- 
 facturing men's and boys' shirts and men's shorts, in addition to 
 underwear. In terms of company expansion, the organization now 
 has 37 employees and 33 machines. 
 
 In another case, we went into a financial partnership with a 
 young man who was highly skilled in the styling of furniture. We 
 had technicians from the United States lay out his factory for better 
 production, our accountants helped him set up a cost accounting 
 system, our buyers gave him written contracts which permitted him 
 to plan his buying of raw materials and to schedule his production. 
 Today the factory employs four times the number of people, making 
 high quality, excellently styled merchandise to be sold by Sears and 
 other stores. 
 
 We have found that technical assistance or guidance— call it what 
 you will— cannot be of the "one shot" variety; it must be continu- 
 ing, and it must be established in such a way that the problem- 
 solving assistance and the new ideas keep coming to the small manu- 
 facturer who cannot economically support major research and 
 development activities. 
 
 Foreign investment also brings with it people— trained, skilled 
 people. Generally speaking, our company and others follow the 
 
PRIVATE SECTOR OF THE ECONOMY 167 
 
 procedure of bringing in a small group of experienced, skilled 
 people to initiate the organization, to teach new skills and new 
 ways of doing old jobs. This cadre understands that it has the 
 function of training others to take over their positions. In our 
 case, to facilitate this process, we have Venezuelan executives at- 
 tend our staff schools in the United States, work with our buyers 
 and other executives, and travel to units in other Latin American 
 countries in order to expedite their progress and acquisition of 
 skills. A company creates wealth not only by bringing in capital 
 and promoting savings, but also by developing knowledge and 
 skills that will be used, expanded, and passed on to others. 
 
 /// 
 
 In addition to these quite well-understood areas of capital, tech- 
 niques, and people, there are also some other important facets of 
 the favorable activities of foreign investment. 
 
 We are all aware of the growing importance of effective working 
 relationships between business and government. For Venezuela, 
 this means not only with the Venezuelan government but with the 
 United States government. United States businessmen generally are 
 in a more effective position to talk to United States government 
 officials than are Venezuelans. I recall very well the time when 
 the Reciprocal Trade Bill was being considered by the United 
 States Congress. Along with that problem, there existed the possi- 
 bility of permanent restriction of imports of Venezuelan oil into 
 the United States. In the face of this problem, a delegation from 
 the American Chamber of Commerce in Venezuela went to Wash- 
 ington to testify before the House Ways and Means Committee and 
 to talk personally with cabinet members and congressmen; as a 
 result, Venezuela's position was better understood and, I am con- 
 vinced, more reasonable action was taken by the United States 
 government than would have been the case otherwise. United 
 States businessmen are skilled at briefing visiting government of- 
 ficials. They are effective in talking to groups in the United States 
 as a means of improving understanding. Just recently. Bill Hinkle, 
 president of the Chamber, has traveled almost the length and 
 breadth of the land, giving talks before thirty business and civic 
 groups, telling them of the investment opportunities in Venezuela. 
 Businessmen are also highly effective in dealing and working with 
 such international organizations as the large foundations, uni- 
 versities, the Rotary, Boy Scouts, YMCA, and similar groups. 
 
168 The Caribbean : Venezuelan Development 
 
 The concept of philosophy of free enterprise in the United 
 States is one of "doing business for a profit with social conscious- 
 ness." United States companies operating in Venezuela should be 
 expected to apply that concept to their operations, the concept of 
 good wages and working conditions, training and promotion for 
 those most capable, and encouragement of participation by the 
 company and its executives, personally and financially, in matters of 
 community and civic interest and welfare. The work of the North 
 American Association and its committees has been outstanding in 
 this respect. 
 
 IV 
 
 The government of Venezuela has stated its desire for additional 
 investment. What are the opportunities? 
 
 Several years ago an officer of a food processing company visited 
 Venezuela to investigate the possibilities of establishing his com- 
 pany there. The company decided to make the investment. Two 
 years later, I talked with him in Chicago and asked him how the 
 venture had worked out. He replied by saying: "I am sure that 
 most persons, upon being asked if they would prefer investing in 
 Switzerland or Venezuela, would quickly say Switzerland because of 
 the higher degree of political stability. We invested in Switzerland 
 five years ago, and are still sending $240,000 annually to that country 
 to cover our deficit. Our company in Venezuela was in the black 
 at the end of the first year's operation." 
 
 In what areas are there opportunities? One is certainly familiar 
 to us: in Mexico, Colombia, and Brazil, 98 per cent of the items we 
 sell are manufactured in the country. In Peru, 72 per cent are man- 
 ufactured locally. The Venezuelan percentage is only 55 per cent, 
 and there are many consumer-goods industries waiting to be de- 
 veloped there. 
 
 The role of private foreign investment in Venezuela is that of 
 the supplier of capital; purveyor of techniques, knowledge, and 
 skills; the trainer of people; developer of industry; facilitator of 
 improved knowledge between the people and the government of 
 the United States and Venezuela; and the sponsor of civic, com- 
 munity, and social welfare activities. 
 
 The views I have just expressed are not new. I hope, however, 
 that in their restatement we will find the reasons for the great im- 
 portance of private foreign investment and the need for encouraging 
 it. 
 
Harry A. Jarvis : the role of private enterprise 
 
 IN DEVELOPING COUNTRIES 
 
 \V E HAVE BEEN AWARE for a long time that Florida has 
 had a deep and abiding interest in developing its ties with Vene- 
 zuela. There are very special reasons for these ties: geographical 
 proximity, convenient travel and communications facilities, and 
 many points of interest which are mutual. Many of us who live 
 in Venezuela can testify— a bit ruefully perhaps— to the irresistible 
 attractions of Florida's great shopping centers. Trade relations go 
 much deeper, however, than personal shopping expeditions. In an 
 economic study made a few years ago, we found that close to $30 
 million worth of merchandise, together with agricultural and manu- 
 factured products, left Florida ports in a single year on their way 
 to Venezuela. 
 
 Happily, this trade and travel is two-way. Delicious shrimp from 
 Lake Maracaibo are flown up here regularly for the delight of 
 Floridian connoisseurs of fine seafood. There is a large consumption 
 in Florida of Venezuelan fuel oil, and it would be a good guess 
 that the source of power for the electricity to light this room is our 
 fuel oil. I am happy to report, also, that an increasing number of 
 citizens of this state are taking advantage of the excellent air and 
 sea communications with Caracas to explore Venezuela's fascinating 
 tourist attractions. 
 
 There is ample reason to believe that two-way trade, two-way 
 travel, and two-way interest will be maintained and increased in 
 the future. This conference organized by the School of Inter-Ameri- 
 can Studies will give participants the opportunity to study the cur- 
 
 169 
 
1 70 The Caribbean : Venezuelan Development 
 
 rent Venezuelan scene in depth; it reflects an interest on your part 
 that transcends purely economic or geographic factors. Such a 
 study can only bear fruitful results, and it is for that reason that 
 Creole Petroleum Corporation is pleased to be represented here 
 and to have been able to contribute financially to help make this 
 meeting possible. 
 
 In the Venezuelan background presentation this morning, pe- 
 troleum was mentioned frequently. The oil industry in Venezuela 
 may, indeed, look back upon a productive past and also, I hope, 
 look forward to an equally productive future. My own company 
 and its predecessors can now claim forty years of activity, and at 
 least one of our competitors goes back for nearly half a century. 
 
 Were I to recount history, I could tell of the adventurous and 
 ingenious oil pioneers, most of them North American, British, or 
 Dutch, who hacked paths through jungle and swamp, who braved 
 all manner of disease and hardship, who even stopped a few Indian 
 arrows, and who brought in the first oil wells. These rough and 
 ready individualists often formed close friendships with the Vene- 
 zuelans alongside whom they worked, but as large numbers of 
 foreign technicians came to the country to operate an expanding 
 industry, social and economic distinctions sometimes tended, un- 
 fortunately, to develop. Great sums of money were needed to build 
 camps and operating installations in those early days, and taxes 
 paid were necessarily low. 
 
 This, of course, is the background, and blessedly far back it is! 
 The Venezuelan oil industry today takes second place to none in 
 the skill and ability of its work force, the modernity of its plant 
 and equipment, the efficiency of its operations, and its role as a 
 positive factor in the nation's growth. Venezuelans fill a majority 
 of administrative and technical positions. United States investment 
 in the industry is the largest, by this country, in any single nation 
 in the world. As an indication of operational efficiency, it might be 
 mentioned that private oil companies last year were able to pay 
 a daily tax bill of nearly $3 million and still show a profit. 
 
 I think a valid point can be made that, with respect to its oil 
 industry, Venezuela today definitely is not an underdeveloped na- 
 tion. Oil is Venezuela's principal natural resource, and it has been 
 developed rapidly and energetically by private enterprise. This has 
 
PRIVATE SECTOR OF THE ECONOMY 171 
 
 provided the Venezuelan nation with a large and steady income 
 for development purposes. 
 
 In addition, the private sector of the economy in general has in- 
 creased greatly in strength and importance since the end of World 
 War II. Eminent representatives of Venezuelan industry, finance, 
 and agriculture are with us at this conference. The progress and 
 energy which are increasingly characteristic of the Venezuelan— and 
 Latin American— managerial class should be recognized as one of 
 the most encouraging developments in the area. 
 
 In Venezuela, raw material producers, industrialists, and agri- 
 cultural operators combine to constitute a creative and productive 
 force of tremendous potential. Their activities, if carried out in an 
 investment climate propitious to private enterprise, can best assure 
 the production of wealth which is the basis for national growth 
 and development. 
 
 II 
 
 In considering the role of private enterprise in developing 
 countries and in the particular segment of these countries that in- 
 terests us— Latin America— the Alliance for Progress immediately 
 comes to mind. The prophets of gloom and doom have been en- 
 joying a field day recently in their comments on this program, and 
 I am sure that Ambassador Moscoso will deal adequately with their 
 pessimism later on. I will just say that those who expected the 
 Alliance to transform Latin America overnight, together with those 
 who expected it to be an unbroken series of advances, are simply 
 not being realistic. This is a long-range project, in which progress 
 must be measured in years, rather than in days. But its goal of 
 basic modification of the hemisphere's economic and social struc- 
 ture is a valid one, in which private enterprise is and has been all 
 along profoundly concerned. 
 
 The role of private enterprise in the Alliance program is a great 
 deal more important than many people realize. The financing by 
 government and international money agencies is expected to pro- 
 vide little more than one-third of the total of $100 billion, which, 
 according to Ambassador Moscoso's recent speech in Chicago, is the 
 amount of investment needed through this decade to achieve the 
 Alliance goal of an increase of 2.5 per cent per year in Latin 
 American per capita income. Two-thirds of the burden will fall 
 on the private sector, both incoming foreign capital and investment 
 
172 The Caribbean : Venezuelan Development 
 
 from domestic sources. The dimensions of this staggering figure 
 are indicated by the fact that the sum total of United States private 
 investment in Latin America, at the latest reckoning, is just over 
 $8 billion. 
 
 I would point out, however, that these investments have been 
 a tremendous factor in Latin American progress. This fact places 
 private enterprise in a strong position to play a major part in ful- 
 filling the aims of the Alliance. I believe that official quarters in 
 both Washington and Latin American capitals are becoming in- 
 creasingly aware that, if the Alliance is to succeed, the chief drive 
 must come from private sources. 
 
 If the predominant role of the private sector is acknowledged— 
 as it should be— by government, it follows that the main stress of 
 official policies must be encouragement of domestic savings and 
 investment. The private sector should be assisted and stimulated. 
 It should not be subjected to continual restriction and criticism. 
 
 Both in the United States and Latin America, it seems to me, 
 there has been something of a tendency in the past on the part of 
 official quarters to understate the importance of the private sector's 
 contribution. Recently, however, there have been encouraging in- 
 dications, especially in Washington, that government is more and 
 more according due recognition to the substantial accomplishments 
 of businessmen in the general effort toward economic development. 
 Such recognition goes far, of course, toward establishing the atmos- 
 phere for effective cooperation between the private and public 
 sectors that is indispensable to the success of our undertaking. A 
 similar shift in official opinion in the Latin American capitals 
 would further strengthen our prospects for achieving the common 
 goal. 
 
 Our governments urgently need the all-out support of private 
 enterprise if the grand design for hemispheric economic and social 
 development is to be carried through, just as private business needs 
 the understanding and comprehension of its efforts in official 
 quarters so that the two sectors can work together on the task 
 that demands the maximum efforts of both. 
 
 /// 
 
 We of the private sector have a right to expect sympathy and 
 understanding from government, but we must not expect that 
 government provide our main defense against the Communist 
 onslaught. 
 
PRIVATE SECTOR OF THE ECONOMY 173 
 
 In the ideological realm, as in all others, we must rely on our 
 own efforts. We must realize that the primary weapon of the 
 Marxists is the idea. We must counter Marxist theories of de- 
 velopment with our own. We must stand up to their attacks and 
 point out their fallacies. 
 
 The Communists and their allies attack private business and 
 investment chiefly on the following grounds: (1) it requires a 
 profit; (2) it is in private hands rather than state-owned; (3) it 
 often is subject to foreign ownership, thus somehow making it 
 contrary to national interests. 
 
 Under Marxist theory, the effort to make a profit from economic 
 operations is the ultimate crime. Put as simply as possible, what is 
 the case for making a profit? 
 
 First, in the name of profit, private enterprise does its utmost to 
 obtain the optimum use of capital, labor, and materials at its dis- 
 posal. Consequently, more goods and services are produced at 
 lower cost than is possible under any other system. Profits make 
 possible the new investment needed for the growth of any enter- 
 prise. It also means that employees of the enterprise are rewarded 
 for merit and are able to advance as fast as their own skills and 
 application permit. 
 
 Secondly, in the name of profit, there is coming to be a high 
 degree of social responsibility on the part of private enterprise. 
 The assumption of this responsibility is nothing more than en- 
 lightened self-interest. While this may entail acceptance of less 
 than maximum profits at any given moment, it contributes to the 
 acknowledgement by society that profits are justifiable and ac- 
 ceptable. The application of private resources for social purposes 
 is more and more characteristic of twentieth-century private 
 enterprise. 
 
 Thirdly, in the name of profits, it can be demonstrated that not 
 only are society's material needs being met, but that human and 
 spiritual values are being promoted as well. We believe it is self- 
 evident that man will discipline himself and develop his own po- 
 tential more effectively when he is seeking to advance his own 
 interests. The virtues of self-reliance, independence, careful and 
 efficient performance, and individual creativity are by-products of 
 the conditions that prevail under the profit system. And I submit 
 that in fostering these standards, we are making it possible for 
 the individual to live in peace, dignity, and mutual respect with 
 his neighbor. 
 
1 74 The Caribbean : Venezuelan Development 
 
 The Communists have proved that an industrial society can be 
 built upon centralized authority and disregard of man as an 
 individual. We of the West, who want our industrial society im- 
 bued with freedom, have in the profit motive the most reasonable 
 basis for democracy, the form of government we believe to be the 
 most satisfactory and rewarding. 
 
 IV 
 
 Let me turn now to the question of private vs. state enterprise. 
 The point of departure of our Marxist critics in this area is that 
 all means of production must be in the hands of the state. They 
 claim that private enterprise is selfish, exploits its workers, 
 plunders the natural resources of the country, and, in the case of 
 developing countries, seeks to keep the host country in the "colonial 
 status" of the last century. By the same token, they declare state 
 enterprise would remedy all these defects. 
 
 We believe the most effective answer to all these charges is to be 
 found in an objective comparison of the material well-being of 
 the western countries that have flourished under private enter- 
 prise with the conditions in Iron Curtain countries subjected to 
 Marxist economic theory. 
 
 In the case of developing countries, we feel there is an urgent 
 need for a common front in which both private enterprise and 
 the state can make maximum contributions toward national growth. 
 Eugene Black, former president of the World Bank and a man who 
 knows probably as much as anyone about the problems of de- 
 veloping countries, has pointed out that perhaps their major 
 problem is the allocation of limited resources. They must, he said, 
 reach the hard decision of how to invest public funds so that they 
 will produce maximum benefits. 
 
 In the case of developing countries, particularly, we believe that 
 public funds should be destined to the realization of those projects, 
 essential to the nation's growth, that traditionally are regarded 
 as functions of government. The sum total of such projects has 
 been called by the economists social overhead capital, or infra- 
 structure, and includes roads and communications, education, pub- 
 lic health, development of sparsely settled areas, and the like. 
 
 There are no developing countries with enough resources to 
 carry on these activities and at the same time branch out into fields 
 served efficiently by private enterprise. Furthermore, private en- 
 
PRIVATE SECTOR OF THE ECONOMY 175 
 
 terprise operates in its given field with a high degree of efficiency, 
 while the general experience has been that state enterprises not 
 only fail to show a profit but actually drain the public treasury 
 to supply chronic deficits. 
 
 It would seem clear, then, that in all economies there is a function 
 for the state and a function for private enterprise. The combined 
 efforts of both are urgently needed to provide the maximum con- 
 tribution to national development. 
 
 In connection with the third principal target of Marxist attack- 
 foreign capital— I would like to refer specifically to the company 
 by which I am employed, Creole Petroleum Corporation. 
 
 Our character as a foreign enterprise is self-evident, and we 
 make no attempt to disguise it. But we try to show, by our actions 
 and attitudes, that we are motivated basically by the interests of 
 Venezuela and that we believe the interests of Venezuela to coin- 
 cide with our own over the long term. The fact that we have 
 been operating there profitably for forty years would appear to offer 
 evidence that this is a viable position. And although xenophobia 
 has been a convenient rallying cry for demagogues since the days 
 of the Greeks and the Persians, it is possible that this ancient shib- 
 boleth may be losing some of its impact in today's world: the 
 steady "shrinking" of the globe and the growing interdependence 
 of nations are having their effect. 
 
 No modern industrial nation could have achieved its present 
 status without the aid of capital, techniques, and know-how from 
 beyond its borders. It is a familiar story to you all, I am sure, that 
 our own great industrial and commercial growth of the nineteenth 
 century received much of its impetus from British and other Euro- 
 pean capital. 
 
 In addition to its direct economic contributions to the host coun- 
 try, foreign capital brings with it many intangibles that may prove 
 of greater ultimate importance. Modern business management 
 methods, large-scale production techniques, transportation and 
 distribution systems, and other attributes of up-to-date economic 
 operation are among them. Not the least of these benefits is the 
 training and experience acquired by nationals of the host country, 
 who occupy an increasingly important proportion of the top jobs 
 in our enterprises. Four of the nine members of our board of 
 
1 76 The Caribbean : Venezuelan Development 
 
 directors are Venezuelan, a former director is now the head of 
 world-wide producing coordination for our parent firm. Standard 
 Oil of New Jersey, and other Venezuelan executives who received 
 their training in Creole are now active with affiliated companies in 
 Argentina, Colombia, and the United States. 
 
 Allow me to illustrate my remarks with a concrete example of 
 the way we seek to contribute, above and beyond our operations as 
 an oil company, to the Venezuelan economy. 
 
 Creole has always tried to identify its interests with those of 
 Venezuela. We believe a mutuality of interest exists among the 
 government, the community at large, our employees, and, of course, 
 Creole itself. This position has led us into activities that might 
 seem remote from the oil business but that, in the final analysis, 
 contribute to bolstering the economy. They include scholarship 
 programs, extensive contributions to agriculture, housing programs, 
 public health and education projects, and a broad program of in- 
 vestment in such varied projects as hotels, ferry services, food dis- 
 tribution and retailing, hospitals, and packing plants. 
 
 Last year, we took steps to aid the economy, in a period of stress 
 since 1958, in a more systematic way. We established the Creole 
 Investment Corporation to make investments in Venezuela in pri- 
 vate enterprises unrelated to the oil industry. We hope to aid 
 in the industrialization of the country and in promotion of eco- 
 nomic recovery. Lack of capital had been a principal obstacle to 
 both objectives. 
 
 To date, the Investment Corporation has provided excellent 
 results. It has invested $4.2 million in 17 enterprises that have 
 created 1,300 new jobs directly and several thousand additional 
 jobs in back-up and associated industries. It has received over- 
 whelming public support and has attracted a great deal of favor- 
 able comment abroad. 
 
 This project, we believe, fulfills all the basic principles of the 
 private enterprise system that I have enumerated. At the same time, 
 it is making a basic contribution to the Venezuelan economy, the 
 economy of a developing country. I cite it because our company 
 has been directly involved, but other segments of the private sector 
 in Venezuela are carrying out similar projects. 
 
 VI 
 Profit making by private enterprise, whether financed by national 
 
PRIVATE SECTOR OF THE ECONOMY 177 
 
 or foreign capital, is entirely compatible with a broad degree of 
 public responsibility. 
 
 This sense of high responsibility is found in a broad sector of 
 private business in Venezuela: responsibility toward employees, 
 toward the community, toward the public in general, and toward 
 the government. 
 
 We have been speaking of the economies of developing countries, 
 but, in my view, we could speak with equal relevance of the de- 
 veloping nature of private enterprise. Competitive private enter- 
 prise is the most effective system developed to date for providing 
 man with the goods and services he needs and wants in his aspira- 
 tions for the better life. And it carries with it a flexibility and an 
 adaptability that permits it to grow and to change. 
 
 The very forces that have given rise to the revolution against the 
 status quo are forces that were in large degree generated by the 
 economic progress of the Western World, operating under an 
 evolving system of private enterprise. It is these forces which con- 
 stitute the true revolutionary ferment in today's world, and not 
 the doctrine of the Marxists or other totalitarian systems. And it 
 is these forces which impose on private enterprise its demanding 
 role as the chief instrument for progress in the economies of the 
 developing nations. Given its past achievements and its potential 
 for future accomplishment, I am convinced that private enterprise 
 will discharge this role with a full measure of success. 
 
Harry W. Jones : the development of la guayana, 
 
 "the future RUHR OF SOUTH AMERICA" 
 
 On SUNDAY, July 2, 1961, on the site o£ Mesa de Chirica, where 
 the historical Battle of San Felix was fought on April 11, 1817, 
 President Betancourt in a simple but inspiring ceremony laid the 
 cornerstone for the foundation of a new city to be known as 
 Santo Tome de Guayana, destined to become the seat of a future 
 industrial "Ruhr" of South America. 
 
 In any conference or serious discussion relating to the economic 
 and social development of Venezuela, it is most important and ap- 
 propriate to devote close attention to the development of the 
 region known as "La Guayana" in the southeastern part of that 
 country. This area will have its geographical center at a point 
 where the Orinoco and Caroni rivers meet, and will spread out to 
 a radius of 180 miles in all directions. The Venezuelan Guayana 
 Corporation (Corporacion Venezolana de Guayana) has been 
 charged with the responsibility of developing the great natural re- 
 sources of this region, which in the brief span of a few years can 
 offer great possibilities toward the achievement by Venezuela of a 
 truly dynamic and self-supporting economy, and will enable that 
 country to become an important factor in the Latin American 
 Common Market. 
 
 7. Historical Background 
 
 I would like to take you with me on a brief adventure to this 
 land of "El Dorado," which is still the home of the jaguar, the 
 
 178 
 
PRIVATE SECTOR OF THE ECONOMY 179 
 
 deer, the tapir, and the cannibal "caribe" or piranha fish, and whose 
 vast reaches covering the so-called Guayana Shield contain untold 
 wealth in its deposits of high-grade iron ore, manganese, gold, 
 diamonds, nickel, chrome, bauxite, and possibly radioactive ma- 
 terials. Its great rivers are the mighty Orinoco with its path to the 
 sea, and the Caroni with an enormous hydroelectric potential of 
 10 million kilowatts of low-cost electrical energy, which can be 
 harnessed in conjunction with the development of these natural 
 resources to produce riches far exceeding the fondest dreams of 
 the old conquistadors, the corsairs of Sir Walter Raleigh, as well as 
 the Dutch who later came in search of the golden legend. 
 
 It is of historical significance to note that the early patriots, 
 during the eventful and often dramatic life of the Republic, 
 turned their eyes toward the promise and hope of La Guayana, 
 long after the myth of the Golden Fleece was already forgotten. 
 The Liberator, Simon Bolivar, in the darkest hours before the 
 liberation of New Granada, was aided by the grains and cattle 
 wealth of Guayana, and went on to realize his dream of independ- 
 ence of La Gran Colombia. Leading writers and political think- 
 ers of the nineteenth century, such as Samuel Dario Maldonado, 
 left in their books a dazzling and prophetic version of Guayana. 
 Diaz Rodriguez spoke in stirring terms of what the diversified and 
 unused wealth of the Orinoco and its adjacent shores would some 
 day signify for Venezuela. Romulo Gallegos and Andres Eloy 
 Blanco foresaw the Guayana of today and tomorrow as one of the 
 fabulous wealth preserves of the country, with the great promise 
 it held for the progress and future prosperity of its inhabitants. In 
 the year 1962, "El Dorado" is no longer a myth, but a reality, with 
 the first giant steps being taken in the erection of a large modern 
 steel plant at Matanzas on the shores of the Orinoco, and com- 
 pletion of the initial stages of the Caroni hydroelectric develop- 
 ment, which are to be coordinated with other bold and well- 
 conceived plans to make this region one of the greatest industrial 
 complexes in Latin America. 
 
 //. Physical Resources 
 
 The Venezuelan Guayana represents more than one fourth of 
 the total area of the country. The state of Bolivar alone has an 
 area of 283,000 square kilometers. In this vast region, the census 
 taken in 1961 indicated a population of 212,000 persons, which 
 
1 80 The Caribbean : Venezuelan Development 
 
 corresponds to a population density of less than one inhabitant per 
 square kilometer. Notwithstanding the sparse settlement of these 
 regions, the towns of San Felix and Puerto Ordaz, situated on 
 opposite sides of the Caroni River at its confluence with the Orino- 
 co, and which will comprise the new city of Santo Tome de Guay- 
 ana, have had during the past decade the most intense population 
 growth recorded in the country, with an increase from 4,000 per- 
 sons to over 40,000. This fantastic growth brings with it many 
 social and economic problems for the inhabitants of this community, 
 but has forcibly brought to the attention of the authorities the 
 need for detailed urban planning, which will make Santo Tome 
 de Guayana one of the most modern and progressive cities of its 
 type in the world. 
 
 The characteristics of the "Guayana Shield," which consists of 
 very old geological formations, make these lands rather unattrac- 
 tive for agriculture, but there are excellent prospects for cattle 
 raising and the exploitation of vast forest reserves, both of which 
 are under detailed study by the Guayana Corporation. 
 
 Iron ore of the highest grade, in excess of 60 per cent, is found 
 in the fabulous deposits of Cerro Bolivar, the concession of United 
 States Steel, of El Pao, the concession of Bethlehem Steel, and 
 the government reserves of San Isidro, El Trueno, and many others, 
 which bring the total of proven reserves to 1,300 million tons, 
 with the added possibility of sizable new deposits in regions which 
 are yet relatively unexplored. 
 
 There are also important deposits of manganese, nickel, chrome, 
 gold, and industrial diamonds, with further evidence, based on 
 modern exploration techniques, of several other valuable minerals 
 as well as deposits of bauxite. 
 
 There are within a radius of 180 miles from Santo Tome de 
 Guayana, petroleum fields with proven reserves of more than 370 
 million cubic meters of petroleum, and more than 320 thousand 
 million cubic meters of natural gas. Also, within this same radius 
 are located the coal mines of Naricual with proven reserves of at 
 least 30 million tons, the limestone deposits of Anzoategui with 
 reserves of 1,130 million tons, sulfur deposits of 700,000 tons at 
 Sucre, and refractory clay (coalin) in Bolivar of more than 700,000 
 tons. 
 
 This amazing concentration of natural resources, especially min- 
 erals, is favorably situated with regard to the important factors of 
 transportation and communications to the production centers of 
 
PRIVATE SECTOR OF THE ECONOMY 181 
 
 this future industrial complex, and also to the markets of the out- 
 side world. A program of dredging the Orinoco as far as Matanzas, 
 the location of the steel mill, and later on as far as Ciudad Bolivar, 
 will make possible the passage of very large ocean-going vessels. 
 Two railroad lines will converge on Santo Tome to bring iron 
 ore to the Orinoco and a network of highways, already in existence, 
 will be expanded and improved to link this zone with Puerto La 
 Cruz in the north, and with Caracas and the central zone, once 
 the bridge project crossing the Orinoco at Ciudad Bolivar has 
 been completed. Another important bridge, approximately 1,575 
 feet in length, is planned for crossing the Caroni River at Santo 
 Tome and will be placed in service in 1964. Work has already 
 been initiated on a floating dock at the new municipal port 
 facility in Santo Tome, 360 feet long, which will have a capacity 
 for handling almost 100,000 tons of cargo. 
 
 ///. The Guayana Corporation 
 
 It has been fully recognized by the government of Venezuela 
 that, until quite recently, the major share of public funds has been 
 invested in the west-central region of the country, and in the large 
 cities, particularly the Caracas area. This fact has contributed to 
 an overconcentration of population in these cities, creating serious 
 social and employment problems, and accentuating the already 
 sharply contrasting differences with the development of other sec- 
 tions of the country. Obviously, these disparities, and in some cases 
 injustices, have created serious obstacles to the general development 
 of Venezuela; and, in order to rectify the situation, the government 
 has adopted a policy to decentralize future development plans 
 along the lines of geographic area development and diversification 
 of the economy. 
 
 It was upon this premise that the Guayana Corporation was 
 created in December, 1960, with the specific purpose of promoting, 
 organizing, and coordinating the development of the Guayana 
 region. The Guayana Corporation is the first completely autono- 
 mous organization of its kind, reporting directly to the president 
 of the Republic, and operating independently of the National 
 Treasury. 
 
 The principal functions of the Guayana Corporation are to study 
 and develop the natural resources of the zone, to study and de- 
 velop the hydroelectric potential of the Caroni River, to promote 
 
182 The Caribbean : Venezuelan Development 
 
 industrial development within the zone, both public and private, 
 in coordination with the over-all National Development Plan, and 
 to coordinate all activities in the socioeconomic field, including 
 education, health, housing, and employment, with particular em- 
 phasis on the creation and development of the new model city, 
 Santo Tome de Guayana. All the functions of the Instituto Vene- 
 zolano del Hierro y del Acero (Orinoco steel plant), Electrificacion 
 del Caroni (Caroni hydroelectric plants), and Minas de Naricual 
 (coal mines) have been incorporated into the operations of the 
 Guayana Corporation. 
 
 The Guayana Corporation operates under the able direction of 
 its president. Colonel Alfonzo-Ravard, and four principal directors, 
 all of whom are appointed by the president of the Republic. 
 Colonel Alfonzo-Ravard is an outstanding young military engineer 
 officer who has gained an international reputation for his compe- 
 tence as a planner and administrator, and for his high personal 
 integrity and aloofness from politics. Colonel Alfonzo-Ravard in- 
 itiated and directed the original program for development of the 
 Caroni River, starting in 1955, and also served his government as 
 a former president of the Fomento Corporation. I would like to 
 pay a special tribute on this occasion to this fine officer and patriot 
 who has already contributed so much to the present and future de- 
 velopment of his country. 
 
 IV. The Caroni Hydroelectric Development 
 
 It is fundamental to the development of any industrialized region 
 to provide an abundant supply of low-cost electrical energy. To 
 achieve this goal the waters of the Caroni River, which ranks among 
 the five or six rivers in the world, including the Nile and the Volta, 
 with the greatest hydroelectric potential, are being harnessed by 
 the Guayana Corporation. The Macagua No. I Hydroelectric Plant, 
 situated on the lower reaches of the Caroni, not far distant from its 
 confluence with the Orinoco, is already in service, with an installed 
 capacity of 300,000 kilowatts. The initial installation consists of 
 six 50,000 kilowatt hydraulic turbine generator units, which at 
 minimum stream flow are able to supply 300,000 kilowatts of cheap 
 electrical energy, competitive with similar plants anywhere else in 
 the world. The electricity from Macagua is transmitted a relatively 
 short distance by high voltage lines (115 KV) to the steel mill at 
 Matanzas, and will also be available for the growth of new in- 
 dustries and processing plants in this vicinity. 
 
PRIVATE SECTOR OF THE ECONOMY 183 
 
 A second step is already under way for completion of studies and 
 the engineering design of the great Guri Dam, upstream, which, 
 when completed in 1966, will provide regulation and storage of 
 these waters, making possible the downstream generation of nearly 
 5 million kilowatts of electric power, through the progressive 
 installation of other hydroelectric plants along the course of the 
 lower Caroni. The Guri Dam, which will have an initial height 
 of 300 feet, will be one of the largest engineering works of its kind, 
 not only in Latin America, but in the entire world, with a total 
 generating potential of more than double that of the High Aswan 
 Dam in Egypt. Ten large generators, with a combined capacity of 
 1,750,000 kilowatts, are projected for the first stage of the Guri 
 power plant during the period 1968-81. The second stage (1982) 
 will involve raising of the height of the dam to 375 feet with the 
 installation of additional generating units to bring the total 
 capacity of the plant to 3 million kilowatts. The final stage will 
 witness a further increase in the dam height to 450 feet, which, 
 combined with still another row of generating units, will bring 
 the total capability of the Guri plant, alone, to nearly 6 million 
 kilowatts. 
 
 These figures stagger the imagination when one realizes that 
 the total hydroelectric potential of the Caroni after completion of 
 the Guri Dam will approach 10,500,000 kilowatts, or visualizes 
 the power plant sites, which have been determined to be both 
 technically and economically feasible through careful studies by the 
 Guayana Corporation engineers with the assistance of renowned in- 
 ternational consultants. 
 
 V. The Orinoco Steel Plant 
 
 The most important event in the economic history of Venezuela 
 since the discovery and subsequent development of its petroleum 
 resources some 35 years ago was the inauguration of the Orinoco 
 Steel Plant on July 9, 1962, at Matanzas on the bank of the Orinoco 
 River. Prior to the completion of this modern and completely 
 integrated steel producing facility, the country was obliged to im- 
 port 95 per cent of its iron and steel requirements, which during 
 the past three years have approached 1,850,000 tons with a cor- 
 responding value of Bs. 1,300 million, or approximately $300 million 
 in foreign exchange. The Orinoco Steel Plant, which will be fully 
 completed within 18 months, and producing at full capacity within 
 
184 The Caribbean: Venezuelan Development 
 
 four years, will furnish a considerable amount of the nation's re- 
 quirements for steel products, resulting in initial savings of nearly 
 $150 million in foreign exchange. The completion of this plant 
 represents an investment of approximately $360 million by the 
 government of Venezuela, but in addition to the benefits to the 
 country, referred to before, Venezuela will also become an exporter 
 of certain steel products, particularly seamless pipe and structural 
 angles, when circumstances permit, and gainful employment will 
 be provided for 6,000 persons in its operations. 
 
 The first stage of this project will produce 600,000 tons annually 
 of finished products as follows: 
 
 Tons 
 
 Structural angles 
 
 70,000 
 
 Rails 
 
 60,000 
 
 Steel bars 
 
 85,000 
 
 Sheets 
 
 10,000 
 
 Plain wire 
 
 10,000 
 
 Seamless pipe 
 
 300,000 
 
 Barbed wire 
 
 15,000 
 
 Cast-iron pipe 
 
 30,000 
 
 Miscellaneous castings 
 
 20,000 
 
 Total 
 
 600,000 
 
 In full production, the Orinoco Steel Plant will use in a year: 
 
 1,200,000 tons of iron ore 
 
 250,000 tons of coke 
 
 200,000 tons of limestone 
 1,800,000 kilowatt hours of electrical energy 
 
 This modern steel plant will utilize the iron ore, manganese, and 
 limestone of La Guayana, and virtually all of the electrical energy 
 consumed will come from the Macagua No. I Hydroelectric Plant 
 some ten miles away. The large quantities of coke required, how- 
 ever, must still be imported from abroad, and in March of this 
 year a contract was signed with Strategic Patents Limited of the 
 United States, to obtain an exclusive patent for use of the Strategic 
 Udy Process, whereby the local coal from the mines of Naricual 
 may be substituted for coke as a reducing agent in the great electric 
 reducing furnaces. The first of the nine Norwegian reduction 
 furnaces has already been converted to the Strategic Udy Process 
 and it is calculated that furnace production may be increased by 
 
PRIVATE SECTOR OF THE ECONOMY 185 
 
 this method as much as 50 per cent to 100 per cent with a cost re- 
 duction per ton between 10 per cent and 20 per cent. If the Stra- 
 tegic Udy Process lives up to expectations, additional furnaces will 
 be converted to this method, which will reduce, and eventually 
 eliminate, the requirements for coking coal, making this plant a 
 virtually self-contained area operation. Also, in order to ensure 
 a continuous and reliable supply of electric energy for these 200 
 ton-per-day furnaces, a 20,000 kilowatt thermoelectric power plant 
 has been installed on the site of the steel mill for operation in the 
 event of temporary failure of the outside source of electric power. 
 A second stage of the Orinoco Steel Plant is already projected, 
 which envisages production capacity of 1,200,000 metric tons to 
 meet all demands of the growing internal market and to further 
 enhance the possibilities for export of its finished products. 
 
 VI. A Model City— Santo Tome de La Guayana 
 
 One of the tasks which has been assigned a top priority by the 
 Guayana Corporation is the building of the future great city of 
 Santo Tome de la Guayana, which will carry the name and the 
 tradition of the first settlement south of the Orinoco, established 
 by don Antonio de Berrios on December 21, 1595, but which was 
 later destroyed by pirates. 
 
 The location of this new model city is at the point of confluence 
 of the Caroni and Orinoco rivers, extending for approximately 15 
 miles from the site of the Steel Mill on the west, to the east of the 
 old port city of San Felix on the opposite side of the Caroni. This 
 is the natural center for development of the Guayana region, and 
 the construction of a bridge 1,575 feet long over the Caroni, to be 
 completed in 1964, will permanently link together the existing 
 towns of Puerto Ordaz and San Felix, to form a geographic unit 
 upon which an entire new community will be built to accommodate 
 100,000 persons in the next few years, and 250,000 within 20 years. 
 
 Such a complex undertaking requires the most careful and de- 
 tailed planning, and with the object of obtaining highly qualified 
 advice on this project, the Guayana Corporation has signed a con- 
 tract with Harvard University and the Massachusetts Institute of 
 Technology by means of which the Joint Center for Urban Studies 
 of these institutions will actively collaborate in the conception and 
 realization of the plans to construct this model city, whose growth 
 must be closely coordinated with the over-all development of the 
 Guayana Zone. 
 
186 The Caribbean: Venezuelan Development 
 
 The basic plan calls for the location of the industrial area at 
 each end of the city limits with the heavy industrial plants, such 
 as the Steel Mill, on the west, because of prevailing winds which 
 will carry the smoke and dust away from the city, and the so-called 
 light industries to the east in close proximity to the new port fa- 
 cilities. These two industrial areas will ultimately each provide 
 employment for some 30,000 persons. 
 
 The planning of this new community must include, of course, 
 housing developments on a very large scale, and extensive studies 
 have been made to provide both low- and medium-cost houses of 
 modern design for its inhabitants by the Banco Obrero (Workers 
 Bank), and private construction firms such as the Fundacion de la 
 Vivienda Popular, with provisions for mortgage-type financing. 
 
 The residential areas planned for the new city will be laid out 
 in such a manner that school children will be able to walk to their 
 neighborhood schools without having to cross the streets. Con- 
 siderable emphasis is being placed on environmental sanitation and 
 public health, along with the construction of modern hospitals and 
 clinics. Equally important is the program for education for the 
 citizens of Santo Tome, both from a social and technical standpoint. 
 An extensive program for the construction of both primary and 
 secondary schools is under way, and in collaboration with the 
 Ministry of Education, a new modern University of the East will 
 be completed to provide technical and vocational training at all 
 levels. 
 
 A major problem confronting every large population center in 
 Latin America today is the absorption of many thousands of mi- 
 grants from the rural areas and their adaptation to urban living. 
 It was previously mentioned that during a period of scarcely ten 
 years the population of the Puerto Ordaz-San Felix area has ex- 
 ploded from 4,000 to over 40,000 inhabitants, many of whom were 
 attracted from the interior by new opportunities offered by the 
 construction of the Steel Mill and related developments. This 
 has given rise to an emergency plan which must be simultaneously 
 carried out by the Division of Urban Development of the Guayana 
 Corporation in conjunction with the long-range plans described 
 before, to raise living standards of the present inhabitants, to pro- 
 vide employment opportunities, and to prevent and minimize the 
 growth of slum areas, which are so characteristic in other rapidly 
 expanding cities elsewhere in Latin America. 
 
 The total cost for the development of Santo Tome de Guayana 
 
PRIVATE SECTOR OF THE ECONOMY 187 
 
 —"The Model City"— in terms of the immediate and future plans 
 described previously, is estimated at approximately $390 million. 
 This massive expenditure will bring about, however, the realization 
 of one of the most advanced and well-planned communities of its 
 kind in the world, which will serve not only as a seat of govern- 
 ment and as an industrial center in this important area, but also 
 will prove to be a source of inspiration, hope, and pride to the 
 people of Venezuela, as a symbol of their great economic and social 
 progress in the years to come. 
 
 VII. The Role of Private Enterprise 
 
 It is essential to the ultimate success of the Guayana Program 
 for private enterprise to play its role, in close cooperation with 
 the government of Venezuela, in the achievement of the most im- 
 portant long-range goals, that is, economic independence for the 
 country and provision of a better way of life for its people. These 
 must be accomplished, through full and proper utilization of the 
 resources of both private capital and labor, in an atmosphere of 
 incentives, profits, and recognition of outstanding performance and 
 skills, which are essential elements for true economic and social 
 progress in a free society. 
 
 The government of President Betancourt and the directors of 
 the Guayana Corporation have already indicated an awareness of 
 the importance of the private sector. One such encouraging develop- 
 ment has been an association by the Guayana Corporation with 
 the Reynolds International, a subsidiary of Reynolds Aluminum 
 Company, for the formation of a mixed company, ALCASA, for 
 the production of aluminum by the electrolytic reduction process, 
 utilizing low-cost electrical energy generated by the Caroni hydro- 
 electric plants. This project contemplates the production of 22,500 
 metric tons of primary metal, initially for the national market, 
 with expansion possibilities for production of 100,000 to 250,000 
 tons, and with an eye toward the world export markets. 
 
 United States Steel Corporation and Bethlehem Steel have 
 made investments of considerable magnitude in the development of 
 their concessions at Cerro Bolivar and El Pao and in the form of 
 modern transportation and ore handling facilities on the Orinoco. 
 Phillips Petroleum has established a petroleum shipment depot 
 at Santo Tome, with a capacity of 25,000 barrels daily, bringing 
 the crude from its fields in Anzoategui through a 60-kilometer pipe 
 
1 88 The Caribbean : Venezuelan Development 
 
 line which crosses the Orinoco River. There are many other private 
 projects under consideration, inherent to the growth of the zone, 
 which have the encouragement of the Guayana Corporation, in- 
 cluding construction materials, ceramic materials, and the creation 
 of an integrated wood products industry. It has previously been 
 commented that private construction firms will also actively par- 
 ticipate in commercial construction and residential housing projects 
 in the new City of Santo Tome, as well as future urban develop- 
 ments in the zone. 
 
 It is also appropriate to mention here the activities of the Creole 
 Investment Corporation, a subsidiary of Creole Petroleum, which 
 was established in August, 1961, with a capital of $10 million to 
 be used, in partnership with Venezuelan private capital, to further 
 the development of the country in fields unrelated to the pe- 
 troleum industry. These include industry, agriculture, and animal 
 husbandry. One of the first projects in the Guayana Region, in- 
 itiated with the assistance of Creole Investment Corporation, is 
 Industrias Alfareras de Guayana C. A., who are building a kiln for 
 the manufacture of bricks, a currently scarce item in the zone. 
 Creole Investment Corporation has already invested over $4 million 
 in 16 companies since its existence, generating nearly $16 million 
 from local Venezuelan sources in the process, which is a most 
 welcome and effective stimulus to the development of private in- 
 dustry. With nearly |6 million remaining to invest, it is hoped 
 that Creole Investment Corporation may channel more of its efforts 
 to the development of a variety of industries in the Guayana Zone, 
 both in Santo Tome and in the regions of the interior. 
 
 Of further interest are the activities of the privately sponsored 
 philanthropic foundations such as the Fundacion Mendoza and 
 the Fundacion Creole, which can also make important contributions 
 to the development of La Guayana and the welfare of its people. 
 These foundations perform many useful and praiseworthy functions, 
 including scientific studies and investigations in agriculture and 
 the socioeconomic fields, the elimination and prevention of com- 
 municable diseases, and the sponsoring of scholarships in science 
 and agriculture for talented young men and women. Such efforts, 
 which are wholly supported by private enterprise, are welcomed 
 by the government of Venezuela, since they effectively complement 
 the activities of its development and social agencies, and often pro- 
 vide valuable guidance in the form of new discoveries and tech- 
 niques which can be put to use for the benefit of all the people. 
 
PRIVATE SECTOR OF THE ECONOMY 189 
 
 There is growing concern, however, among the proponents of 
 private enterprise over the fact that in many of the developing 
 countries in Latin America there is an increasing tendency to bring 
 under state control not only the public services, such as electric 
 power and communications, but also the basic major industries. 
 There are various reasons for this trend of events, and foremost, 
 perhaps, is the absence of a favorable "investment climate" for 
 private venture capital, both local and foreign, to initiate and 
 undertake these large key industrial projects. Other reasons involve 
 nationalistic spirit, concern for national resources, political ex- 
 pediency, and in some cases fixed conceptions regarding the advan- 
 tages of a state-controlled economy, which have too often contribu- 
 ted to the discouragement of private enterprise from assuming its 
 natural role in the growth of a vigorous and fully integrated 
 economy. 
 
 However, rather than dwell on the pros and cons of this subject 
 at the moment, and with the hope of stimulating further discussion 
 during the remaining sessions of the conference, I would like to 
 comment on a formula for development in Latin America which 
 represents a practical compromise between the two extremes of 
 government control and strictly private enterprise. This plan in- 
 volves the joint participation with private industry by the Govern- 
 ment Development Agency (Corporacion de Fomento), preferably 
 in a minority position, in the initial stages of an industrial project, 
 with the benefits of providing political support to the project, par- 
 tial provision of local funds required, and at times, qualifying 
 the project for a government guarantee when required by inter- 
 national lending agencies. This participation by Fomento would 
 be carried out, however, with the proviso that within a reasonable 
 period of time it would withdraw from the project and sell its 
 shares to private ownership and/or to the general public to convert 
 the operation to a predominantly private enterprise. This has been 
 successfully done in Chile in the case of the C.A.P. Steel Mill (Com- 
 pafiia de Aceros del Pacifico), which after only a few years of suc- 
 cessful operation is now 67 per cent privately held with an impres- 
 sive portion of the shares in the hands of the general public. In 
 both Venezuela and Colombia, there has been considerable prog- 
 ress in this direction, and I am personally familiar with several 
 industrial projects in which this formula has been remarkably suc- 
 cessful. In these instances, the Fomento Corporation, after pro- 
 viding initial equity participation, has seen fit to completely dispose 
 
190 The Caribbean : Venezuelan Development 
 
 of its holdings to private sources under a previously agreed upon 
 time schedule. The benefits to the Fomento Corporation, in addi- 
 tion to stimulating the growth of local private industry, are that 
 the Fomento should be able to dispose of its shares at a reasonable 
 profit, once the particular industry is in full operation, and also to 
 reinvest these funds in other promising situations on a similar 
 basis. 
 
 In the case of the association between the Guayana Corporation 
 and Reynolds, which is initially contemplated on a fifty-fifty basis, 
 it would be a great step forward if consideration were given to 
 offering the government-held shares, in whole or in part, to the 
 general public after there has been reasonable appreciation result- 
 ing from a period of profitable operations, and also if this same 
 philosophy could be applied in gradual steps to the Planta Sid- 
 erurgica del Orinoco, even though this project at present is wholly 
 owned and operated by the government. 
 
 VIII. The Future 
 
 The principal objectives of the Venezuelan government in form- 
 ulating its over-all development plans are essentially those points 
 which have been discussed here today— the building of a strong and 
 broadly based economy, diversified along geographical lines, steady 
 improvement in the living standards of the people, and the pro- 
 vision for more and better employment opportunities. It is impor- 
 tant to understand that the problems which confront Venezuela at 
 present are rather different from those facing many other develop- 
 ing countries. 
 
 Over the past 25 years there has been a sustained and, at times, 
 almost spectacular economic growth in Venezuela, based mainly 
 on government income from the exploitation of the country's pe- 
 troleum resources. The increases in national income, however, 
 have accrued principally to only a small segment of the population, 
 with a large majority of the people still confined to a rather low 
 standard of living. 
 
 If this complex problem of relatively low living standards for the 
 majority of the population is to be progressively resolved, the 
 economic growth of Venezuela must continue at a rate substan- 
 tially above the rate of increase of population (approximately 3 
 per cent) and the labor force. Based on recent studies, it is evident 
 that even a modest rate of expansion in the economy of 5-6 per cent 
 
PRIVATE SECTOR OF THE ECONOMY 191 
 
 will not be possible unless the petroleum industry remains in a 
 healthy state and continues to contribute substantial revenues to 
 the government, making it vital for Venezuela to maintain a strong 
 position in the world petroleum markets. However, in view of 
 rapidly developing sources of petroleum in other parts of the world, 
 and the ever-present possibility of the development of low-cost 
 alternative sources of energy, Venezuela is obliged to seek economic 
 diversification and gradually reduce its almost complete dependence 
 on petroleum for economic growth. 
 
 Hence, it is against this background that we draw our conclu- 
 sions, emphasizing the great material and spiritual significance 
 which the development of La Guayana holds for the people of 
 Venezuela. It is reasonable to predict that within a span of a few 
 years the Guayana region shall be for Venezuela, relatively speaking, 
 what Pittsburgh is to the United States, the Ruhr is to Germany, 
 and the Urals are to the Soviet Union. This great industrial com- 
 plex will not only furnish the growing needs of the nation, but 
 will definitely make Venezuela a strong and vigorous participant 
 in the Latin American Common Market, as well as other related 
 markets of the world. 
 
 It is a fitting sequel that the Venezuelan Guayana, which ma- 
 terially aided the armies of the Liberator to achieve political in- 
 dependence some 150 years ago, may now prove to be the means of 
 achieving economic independence and lasting social progress for 
 its citizens. 
 
PartV 
 
 AGRARIAN REFORM 
 
Eduardo Mendoza G. : agriculture: the 
 
 KEY TO DEVELOPMENT 
 
 -L O ANALYZE, even superficially, Venezuela's agricultural de- 
 velopment in recent years leads to the discovery of a radical change 
 in the structure of the country's resources. 
 
 /. Background 
 
 A series of events of major importance to the country marks the 
 period. They include the elimination of malaria, the construction 
 of a series of projects of social over-all significance without which 
 future progress would be impossible, the explosive increase of the 
 population, a decrease in illiteracy, an improvement in university 
 education, and, of particular significance, the transfer of political 
 influence (although not necessarily political power) from the rural 
 landowner to the businessman and the industrialist, as well as to 
 the professions and to the vigorous middle class, urban and rural, 
 all joined together in a form of social democracy, in which personal 
 merit and economic power prove more important than one's family 
 or lineage in one's advancement. 
 
 The still-pastoral Venezuela of 1922 had a population of 2,365,098 
 (80 per cent of it rural), beset by extremely low purchasing power, 
 a high percentage of infant mortality, a tragic incidence of malaria 
 and many other tropical diseases, and with financial resources so 
 scanty that the national budget for that year was a mere 
 Bs.72,014,302. 
 
 Agriculture and the import-export trade (especially exports of 
 
 195 
 
196 The Caribbean : Venezuelan Development 
 
 coffee and cocoa) were the principal factors of the economy. Up 
 to that time our economy was, essentially, no different from that 
 of our neighbors of South or Central America. 
 
 However, as is generally known, in that year the oil industry 
 began and subsequently developed rapidly, at a time when the 
 country was passing through one of its most critical situations: 
 agricultural production was starting to drop, and, in the period of 
 1913 to 1929, imports rose steadily, producing deficits in the bal- 
 ances of trade and of payments. Our administrative deficiencies 
 were such that the resources and wealth created by oil production 
 were not properly utilized to provide balanced economic develop- 
 ment. 
 
 So far in the present century, and particularly since 1925, Vene- 
 zuela's development has been marked by two major features. One 
 is the preponderant position of our country as an oil producer, and 
 the other is the fact that it is a highly desirable market for imports 
 of all kinds. From 1950 to 1958, there was abundant wealth that 
 attracted people and capital from every corner of the globe. Vene- 
 zuela's heritage turned to beyond the seas, and its doors opened 
 wide to foreigners and its own sons searching for an El Dorado that 
 was no longer mythological. 
 
 For a period of almost 35 years, agriculture failed to keep pace 
 with the growth of other sectors of the economy, and it not only 
 was incapable of responding to growing demand, but the cultiva- 
 tion of traditional crops actually declined. 
 
 In view of this background, it would appear not only naive but 
 sterile to speak of Venezuela's agricultural wealth. However, even 
 the most cursory review of the country's history will provide com- 
 pletely different insights; and although the knowledge thus dis- 
 closed would, under no circumstances, warrant the description of 
 Venezuela as an agricultural power of the first order, it does make 
 clear that the country's destiny, its prosperity, and its future de- 
 velopment are by nature inextricably linked to the useful employ- 
 ment of the land factor. 
 
 It would seem that the spirit which animated Columbus has 
 stalked the pages of our entire history, for when the Genoese navi- 
 gator set forth from Palos de Moguer on his great adventure, which 
 eventually transformed the Kingdom of Castile into the greatest 
 empire the world had known, he was not searching for El Dorado, 
 nor could he have been aware of the mines of Mexico or Peru, 
 nor of the pearls of Cubagua. He was searching, indeed, for a 
 
AGRARIAN REFORM 197 
 
 product of the soil: the spices of India. This incentive led him to 
 discover something which was termed the New World. The name 
 was well chosen, for it was in truth a new world, so new that it 
 gave the continent some of its principal crops, such as corn, po- 
 tatoes, and tobacco. Few spices were found, nor was a new route 
 to India discovered, but Vespucci gave his name to a world that 
 stretches from the frontier with Russia to the South Pole, a vast 
 domain in which Carlos V established a small Captaincy General, 
 Venezuela. 
 
 When the treasures of Cubagua had been exhausted and the 
 search for gold had proved futile, the colony turned its attention 
 to a prodigious but difficult nature, hoping to find in agriculture 
 the wealth that the subsoil was to reserve for the fortunate residents 
 of the twentieth century. A glance back through the history of 
 Venezuela discloses a surprising continuity of administrative policy 
 whose objectives reflect an admirable insistence on the need to de- 
 velop our agricultural potential. This attitude is first noted during 
 the colonial period, after centuries of dedicated effort, and the 
 result was that "in the first 30 years of the eighteenth century, 
 643,215 fanegas (1 fanega is equal to 1.6 bushels) of Venezuelan 
 cocoa were exported to the Peninsula, and in the following 16 
 years, exports came to 269,247 fanegas."^ 
 
 The products of the land were the principal source of wealth and 
 of labor. In 1777, the recently-established Captaincy General began 
 to seek export markets for Venezuela's agricultural and livestock 
 products. Hides, lard, hams, cotton cloth, sugar, and cocoa were 
 shipped to the Antilles, to Cartagena, Mexico, and Spain. Coffee, 
 which appeared later, was to play a leading part in the economic 
 and social development of Venezuela until 1930. 
 
 Thanks to this agricultural development, relative prosperity had 
 been won by the end of the eighteenth century. Partly responsible 
 for this development, beyond doubt, was the highly controversial 
 Guipuzcoan Company which, established in 1728, became a dom- 
 inant factor in Venezuelan life until the beginning of the nine- 
 teenth century, although it brought its activities to a close in 1785. 
 According to Arturo Uslar Pietri, in the valleys of the Aragua and 
 the Tuy rivers the fields were dotted with plantations and settle- 
 ments. The first credit systems were established. One hundred 
 years later, foreign visitors still were impressed by the irrigation 
 
 1. Jose Gil Fortoul, Historia Constitucional de Venezuela, Vol. I, p. 76. 
 
198 The Caribbean : Venezuelan Development 
 
 systems used on Venezuelan plantations. With the refined usages 
 of an easier and more cultured life, the men and the ships of the 
 Company brought with them the restlessness of the Enlightenment. 
 A great deal of French philosophy came over on the cocoa ships, 
 sponsored by the leaders of the Sociedades Amigas del Pais (Friend- 
 ly Societies of the Country). During these years, Venezuela's popu- 
 lation approached 800,000 and exports reached a value of Bs.20 
 million. 
 
 The war effort which made possible our emancipation from 
 Spain found the basis of its sustenance and triumph in an economy 
 centering around the farm, the only source capable at that time of 
 supplying the needs of a long and bloody war. Thus, in exchange 
 for the decline of a relatively flourishing economy, achieved during 
 the colonial period, political freedom was gained. The price al- 
 though justified, was high. "The plantations are semi-destroyed, 
 crops were ruined, cattle turned wild and went into the hills, the 
 struggling industrial installations were put out of commission— all 
 was wiped out in the furor of the great struggle. "^ 
 
 As a result, tax revenues declined precipitously. Ravenga re- 
 ported to Bolivar in 1828: "Customs duties furnished almost noth- 
 ing for the Government. Tobacco revenues, which were more than 
 1,200,000 pesos formerly in this province, now produce less than 
 one-fourth of that amount."^ 
 
 In view of the disastrous condition of public finances, extreme 
 diligence was essential to national reconstruction. It was necessary 
 to use available wealth with the greatest prudence in order to re- 
 store production at least to levels attained before the independence 
 wars. 
 
 The struggling farmer of 1830 faced a grim future, "toiling in 
 fields devastated by the flames of a crippling war of 20 years, which 
 had left a legacy of ashes and debris, grievous monuments to the 
 fury of the conflict. Still smouldering were the holocausts which 
 had consumed the country's greatest fortunes. It was no simple 
 task to transform these wastelands overnight into waving fields of 
 golden corn, or forests of majestic trees; the rocklike, weed-covered 
 earth broke the plow; the farmer's paltry recompense for back- 
 breaking toil was bitterly cheerless, and he was, moreover, constantly 
 
 2. Eduardo Mendoza G., prologue to Ten Years of Shell's Service to the 
 Farmer, 1962. 
 
 3. Jos^ Rafael Ravael Ravenga, Public Finances in Venezuela, 1828-30. 
 
AGRARIAN REFORM 199 
 
 under the threat o£ bandit raids and at the mercy of the harsh ele- 
 ments."* 
 
 This and other chronicles of the period provide a clear idea of 
 the task involved in reconstruction, an unending, dogged, silent 
 labor in which there was no time for empty talk or sterile discussion. 
 
 An increase in exports during the period from 1830-31 to 1845-46, 
 detailed in Table 1, offers eloquent proof of the industry of those 
 Venezuelans as well as of the rewards which Venezuelan soil tenders 
 such efforts. 
 
 TABLE 1 
 EXPORTS OF VENEZUELAN AGRICULTURAL PRODUCTS 
 
 1830-31 1845-46 
 
 Cotton 96,895 lbs. 787,938 lbs. 
 
 Indigo 262,310 lbs. 274,991 lbs. 
 
 Cocoa 215,340 lbs. 9,240,587 lbs. 
 
 Coffee 11,544,024 lbs. 69,062,573 lbs. 
 
 Tobacco 101,450 lbs. 1,693,208 lbs. 
 
 Beef cattle 1,825 head 16,127 head 
 
 Animal hides 209,017 units 803,556 units 
 
 Thanks to this sustained effort and to an increase in the prices 
 of agricultural products, Venezuela again enjoyed prosperity in 
 agriculture and livestock, which was needed to support the blood- 
 letting of the federal wars, starting in 1858, and the interminable 
 struggles that followed. 
 
 From the turn of this century until 1920, efforts continued to 
 restore agriculture, still the backbone of the country's economy. It 
 is to be regretted that, thanks to our lack of foresight and planning 
 the proper utilization of the wealth produced by oil, this industry, 
 which should have been a logical ally in agricultural recuperation, 
 should become instead a cause of basic disequilibrium, decreasing 
 the importance of the agricultural sector of the economy as a whole. 
 
 At the same time, it must be recognized that it was because of 
 the progress of the oil industry that we were able to carry out 
 
 4. Pedro Grases, Economic Society of the Friends of the Country, Vol. I; 
 Venezuelan Historic-Economic Compendium, published by the Central Bank of 
 Venezuela. 
 

 
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AGRARIAN REFORM 201 
 
 the social overhead capital projects that have made possible the 
 progress of today. The most important of these projects was the 
 antimalaria campaign which incorporated into national develop- 
 ment vast and fertile regions previously impossible to use, thus 
 expanding the agronomic map of the country. Also of supreme 
 importance was the growth in purchasing power of the population. 
 
 In spite of the lack of administrative continuity and of the mul- 
 tiple factors that affect our economic development, it can safely 
 be said that the development of our country is presided over by 
 a persevering zeal in making agriculture the bedrock of our daily 
 sustenance and by the prospect of a better and more stable future. 
 
 In the year 1936, under the presidency of General Eleazar Lopez 
 Contreras, a major effort was launched to obtain greater agricul- 
 tural development and to establish the means, methods, and sys- 
 tems needed to resolve the multiple problems of education, health, 
 and economic growth. 
 
 During these last 25 or 30 years in Venezuela's national life, the 
 country has acquired its own particular characteristics; many prob- 
 lems have become enormous in their dimensions, others have been 
 solved, and still others have grown more complicated; but in spite 
 of everything the balance struck has been positive, although much 
 more could, of course, have been achieved. We have come a long 
 way, but the road before us is so much longer that it appears at 
 times that nothing has been accomplished. Table 2 indicates the 
 rapid, and unbalanced, economic growth during the period. 
 
 Similar data may be found in the greater part of the activities of 
 our national life. Table 3, for example, shows the development 
 of our foreign trade. 
 
 TABLE 3 
 Exports Imports 
 
 1946 Bs.l, 449,1 10,671 Bs. 987,155,774 
 
 1957 Bs.7,928,360,591 Bs.6,140,317,960 
 
 1960 Bs.8,446,570,000 Bs.3,552,890,000 
 
 The outstanding features of the trade figures are the unusually 
 large total for 1957 imports, the 1960 growth in exports and the 
 drastic decline in imports that year. 
 
202 The Caribbean : Venezuelan Development 
 
 One important indication of development is the figure for the 
 imports of machinery, instruments, and equipment which rose from 
 Bs.43,875,000 in 1938 to Bs.1,490,772,000 in 1957 and to Bs.2,396,- 
 000,000 in 1961. 
 
 It is of equal significance that in 1936 per capita consumption of 
 foodstuffs was at the level of Bs.380 and oil production was 
 442,514 barrels per day. It was at this time that Venezuela began 
 to search earnestly for sources of wealth other than petroleum, a 
 search that was seriously hampered by inadequate domestic con- 
 sumption, by production costs that were too high to permit compe- 
 tition in export markets, and by the possession of a strong currency 
 in the bolivar. While a solution was being sought for this grave 
 problem, oil production continued to climb and per capita con- 
 sumption of foodstuffs in 1958 reached a level of Bs.630. Currency 
 in circulation increased from Bs.344 million in 1941 to Bs.4,017 
 million in 1958, dropping to Bs. 3,489 million in 1961. 
 
 Unfortunately, our lack of foresight meant that this rapid de- 
 velopment was not reflected in a substantial increase in our agri- 
 cultural resources with the result that our sources of supply, be- 
 ginning in 1936, failed to keep pace with the advances in other 
 sectors of the economy, and these sources shifted successively from 
 Palo Negro or Guacara to Denmark, the United States, the Nether- 
 lands, Poland, Cuba, Ecuador, the Sudan, and Peru. 
 
 A clear idea of the disequilibrium which prevents us from speak- 
 ing of an agricultural Venezuela is given by the fact that agricul- 
 ture's share of the Gross National Product in 1950 was 14.4 per 
 cent, in 1955 it fell to 8.1 per cent and in 1960 to 6.8 per cent. 
 The importation of foodstuffs rose considerably during this period. 
 Using 1948 as the base (100), the unit value of food imports reached 
 193.2 in 1959 and dropped to 114.9 in 1961. 
 
 11. The Present Situation 
 
 Despite our lack of continuity in agricultural development pro- 
 grams and the frequent want of adequate means to compensate for 
 the impact of the oil industry, Venezuela has progressively capital- 
 ized on the efforts to secure adequate agricultural development, at 
 least with respect to the growing purchasing power of our domestic 
 market. 
 
 This is clearly indicated in import statistics, from which a whole 
 series of items until recently imported have disappeared, such as 
 
AGRARIAN REFORM 
 
 203 
 
 rice, sugar, potatoes. At the same time, there has been a substantial 
 increase in the production of some articles that are still being 
 imported, including milk products, eggs, vegetable oils, and cotton. 
 It is warming indeed to see how the production of such articles 
 has increased in Venezuela. The following instances may be men- 
 tioned: in 1949, 3,000 tons of frozen chicken were imported and 
 retailed at Bs.9 the kilogram, while in 1961 the production of fresh 
 chicken was 25,000 tons, which retailed at Bs.5 per kilo; using the 
 1950 production of beef as 100, the index rose to 165.9 in 1959; 
 pork rose from 100 in 1950 to 153.7 in 1959; about 1 million eggs 
 were imported daily in 1957, and domestic production reached 
 that same figure in May of 1961; and, finally, the production of 
 pasteurized milk rose from 13,625,000 liters in 1945 to 139,264,000 
 liters in 1958, an increase of 885 per cent, and to 160 million liters 
 in 1961. 
 
 TABLE 4 
 AGRICULTURAL PRODUCTION 
 
 (tons) 
 
 
 1951 
 
 1959 
 
 1960 
 
 1961 
 
 Sugar 
 
 49,701 
 
 154,581 
 
 193,978 
 
 216,296 
 
 Rice 
 
 40,000 
 
 38,586 
 
 71,862 
 
 80,658 
 
 Sesame 
 
 2,260 
 
 16,230 
 
 24,868 
 
 24,868 
 
 Cotton 
 
 13,320 
 
 25,032 
 
 24,947 
 
 36,380 
 
 Potatoes 
 
 32,011 
 
 93,127 
 
 133,594 
 
 179,977 
 
 The index of agricultural production as a whole rose from 100 
 in 1946 to 156 in 1956, and payment to agricultural workers in- 
 creased from Bs.541 million to Bs. 647 million. 
 
 Agriculture's share of the GNP in 1950 was Bs.1,014 million, in- 
 creasing to Bs. 1,576 million in 1958. During this period, gross agri- 
 cultural investment rose from Bs.345 million to Bs.540 million. 
 
 While total imports rose 48 per cent between 1950 and 1955, 
 the imports of food, beverages, and food products rose only 9 per 
 cent, in spite of the fact that population growth during the period 
 was 15 per cent. 
 
 Although the domestic market was flooded with imported articles 
 that were also being produced in Venezuela, there now set in an 
 
204 The Caribbean : Venezuelan Development 
 
 admirable development of agriculture spurred by growing domestic 
 demand, remunerative prices, and ample credit facilities made avail- 
 able with the creation in 1946 of the Venezuelan Development 
 Corporation. The total impact of these factors, in particular the 
 increasing demand, led to the surprising increases we have referred 
 to. Also of significance was substantial investment in agriculture 
 by the private sector. 
 
 Together with these increases, there was a rise in the produc- 
 tivity of our rural population. In spite of the over-all production 
 increase, this population fell from 65 per cent of Venezuela's total 
 in 1936 to 46 per cent in 1950. Since that year it has remained 
 relatively stable, although there has been a growing tendency in 
 recent years toward migration to the large cities. From 1941 to 
 1950, the agricultural population increased only 10 per cent, while 
 the remainder expanded 65 per cent. 
 
 Agricultural research and experimentation, the basic functions 
 of the Ministry of Agriculture, have played a preponderant part in 
 the rise in productivity of agricultural workers and, consequently, 
 in agricultural production. 
 
 An example of the expanding domestic market is the case of the 
 market for eggs in Caracas, which was oversupplied in 1936 with 
 the output of one farm of scarcely 200 hens; last year, this market 
 absorbed the greater part of the 365 million eggs consumed in the 
 country, the equivalent of the production of 1,825,000 laying hens. 
 
 Reviewing all these figures and the manner in which agricultural 
 production has improved in the last 15 years, in spite of the fact 
 that Venezuela does not boast of unusual conditions for agriculture, 
 we must reach the conclusion that the balance struck has been on 
 the plus side. 
 
 Nevertheless, Venezuela continues to import substantial quanti- 
 ties of agricultural products, with a value of Bs.496 million. To 
 attempt to produce the equivalent of the deficit articles imported 
 in 1958 would mean facing up to the tremendous task of creating 
 jobs for almost 295,000 people, which would require an investment 
 of Bs.3,000 million, which, in turn, would increase the income of 
 the rural sector by Bs. 1,666 million per year. 
 
 ///. Prospects for Agricultural Development 
 
 Like many another country, Venezuela faces a very serious un- 
 employment problem whose solution is indispensable to its eco- 
 
AGRARIAN REFORM 205 
 
 nomic development and social stability. The problem is aggravated 
 by the fact that more than 50 per cent of the population is under 
 19 years of age, and the work force is increased each year by about 
 100,000. 
 
 Government and people, realizing the gravity of the problem, 
 have carried out continuous and praiseworthy efforts to create new 
 sources of jobs through the progressive industrialization of the 
 country, thanks to which some 65,000 jobs have been created during 
 the last three years. However, this figure is so insignificant in re- 
 lation to Venezuela's needs that other means must be devised to 
 solve the unemployment problem, in addition to stepping up the 
 process of industrialization. 
 
 Two possibilities suggest themselves. One, the most widely used 
 and perhaps the easiest with the quickest visible result, is to increase 
 the activity of the construction industry and public works; this is 
 the most readily accessible solution to the problem, but it carries 
 with it certain elements of risk which militate against its adoption 
 as a definitive solution. The second is industrial expansion. But, 
 even assuming optimum industrial development and the greatest 
 effort possible in both government and private construction, we 
 would not approach a solution of this problem; budgetary limi- 
 tations on the one hand, and the inevitably slow process of indus- 
 trialization on the other, in addition to the inability of the domestic 
 market to absorb the products of a great industrial complex, would 
 combine to frustrate our purpose. 
 
 Consequently, we must have recourse to other measures which, 
 together with those just cited, would give us, if not a complete 
 solution, at least a substantial contribution toward the creation of 
 new, stable sources of employment. 
 
 We reiterate that Venezuela, while not constituting an agricul- 
 tural country par excellence, possesses the natural, economic, and 
 domestic market factors which are sufficiently favorable to support 
 intensified exploitation of the soil and its resources. This, together 
 with sound and rapid industrialization and an expansion of the 
 construction industry, would supply the framework for securing the 
 social stability that we so urgently need, raising the standard of 
 living and satisfying fully the essential needs of the population. 
 
 Venezuela's agricultural production increased from a base of 100 
 in 1957 to 102.3 in 1958, 107.6 in 1959, 118.7 in 1960, and 122.2 in 
 1961, or a total of 22.2 per cent. The value of this production, 
 excluding fishing and forest products, rose from Bs.1,418 million 
 
206 The Caribbean : Venezuelan Development 
 
 in 1958 to Bs.1,682 million in 1961 (in 1957 bolivars). However, 
 food imports have also increased, as shown in Table 5. 
 
 TABLE 5 
 FOOD IMPORTS 
 
 (in millions of units) 
 
 1958 1959 1960 1961 
 
 Kilograms 
 
 398.12 
 
 345.09 
 
 685.31 
 
 732.11 
 
 Per cent* 
 
 13.3 
 
 11.8 
 
 30.03 
 
 34.0 
 
 Bolivars 
 
 340.82 
 
 409.01 
 
 523.35 
 
 496.52 
 
 Per cent* 
 
 7.1 
 
 8.1 
 
 14.7 
 
 14.1 
 
 *Percentage of food imports in relation to total imports. 
 
 We are confronted here with the blunt fact that Bs.500 million 
 left the country in each of the last two years to pay for food imports 
 that can and should be produced in Venezuela (with the exception 
 of wheat and barley which in 1961 had a value of Bs.l 13,800,380). 
 
 What it would mean to Venezuela's economic development to pro- 
 duce from our own soil the foodstuffs that our domestic market is 
 forced to buy abroad has been mentioned earlier.^ 
 
 We pointed out on that occasion that Venezuela is in an excellent 
 position to achieve her agricultural recovery. Following are the 
 factors favorable to this: 
 
 1. Well-situated land, not now under cultivation, which could 
 more than cover the deficit from land already in cultivation, plus 
 farms that are now operating inefficiently. 
 
 2. A substantial domestic market now supplied by imports, which 
 could absorb production from new areas put into cultivation, as 
 well as the increased production that could be obtained from more 
 efficient operations on substandard farms. 
 
 3. Credit and other financial facilities. 
 
 Properly employed, these factors together would increase general 
 economic welfare, broaden the consuming sector, and create the 
 sources of employment needed by Venezuela's vigorous population, 
 one of the youngest in the hemisphere. 
 
 5. Eduardo Mendoza G., article in issue No. 4 of the magazine El Mes 
 Economico. 
 
AGRARIAN REFORM 207 
 
 As we have seen, Venezuela can easily produce grains such as corn, 
 milo, and rice; vegetable oils, cotton, sesame, copra, hemp, ramie 
 fiber, beef, pork, mutton, chickens, milk and milk products, fruits, 
 vegetables, and garden stuff. She is also able to develop industries 
 to process these products. 
 
 There is at present a strong movement in defense of our economy 
 which will free our domestic market from the competition that 
 imports give national production; we are also witnessing intensive 
 campaigns by the most diverse national industries for consumption 
 of Venezuelan products; furthermore there is whole-hearted official 
 support for this sound policy which holds the solution of the gravest 
 of our current problems: unemployment. 
 
 It may also be pointed out that the well-spring of development 
 represented by a sound agricultural policy is far from drying up. 
 Coffee and cocoa, Venezuela's traditional crops and her only agri- 
 cultural exports, should be pushed, with larger plantings and 
 serious efforts to increase productivity, even though the present 
 international market is over-supplied and highly competitive. Un- 
 less this is done, coffee and cocoa will also become import items 
 in the future. Table 6 clearly illustrates the decline in cocoa 
 production, with 1961 production of 9,051 tons only slightly more 
 than half the 1950 output. 
 
 TABLE 6 
 
 PRODUCTION OF COFFEE AND COCOA, 1950-61 
 (metric tons) 
 
 Year Coffee Cocoa 
 
 1950 33,983 16,887 
 
 1951 43,294 17,000 
 
 1952 54,000 16,000 
 
 1953 44,808 16,000 
 
 1954 53,427 15,000 
 
 1955 46,295 15,000 
 
 1956 58,000 16,000 
 
 1957 50,323 15,229 
 
 1958 61,819 14,769 
 
 1959 54,597 12,073 
 
 1960 55,072 8,485 
 
 1961 53,502 9,051 
 
 An important point that must be borne in mind, with respect to 
 
208 The Caribbean: Venezuelan Development 
 
 coffee, is its value as a weapon against erosion and as a factor in 
 climate improvement because of its contribution to forestation of 
 mountainous zones. 
 
 From what has been stated, it is clear that agriculture offers 
 Venezuela the immediate possibility of creating 295,000 jobs, of 
 improving the balance of payments in the amount of Bs.500 million, 
 and of raising the gross income of the rural sector of the country 
 by Bs. 1,666 million (1957 value). 
 
 To do this job would mean carrying out a tremendous project 
 of economic development through agriculture and through the 
 sound utilization of natural resources. Assuming that the necessary 
 means for its realization were available, we would still have to 
 work out the modus operandi to carry it out. 
 
 One possibility would be to establish private companies or to 
 expand existing enterprises that would assume the responsibility 
 for producing in the near future all agricultural products now im- 
 ported as well as those which will have to be imported shortly if 
 production is not raised. This would lighten the administrative 
 burden of the government, would save foreign exchange, and would 
 create the sources of employment which we so urgently need. But 
 it would also have the defect of placing responsibility for agricul- 
 tural development and progress on one sector alone, that of large 
 and medium farmers, in prejudice of the peasant or share-cropper 
 (conucero), who should play a part. More properly, this is an under- 
 taking to which all sectors should contribute. It should be a joint 
 project of all, united in an effort to obtain the economic recovery 
 of the nation as a guarantee of democratic stability, its goal greater 
 per capita income for all, regardless of status, thus combining with 
 the greater production of goods and services a more equitable 
 distribution of the new wealth. 
 
 In contrast with other less fortunate countries, we have all the 
 necessary elements to achieve agricultural development: the ability 
 to carry out an ideal and reasonable agrarian reform for greater 
 production and greater per capita income, in which the social aspect 
 complements the benefits to be derived from the increased wealth. 
 
 With the passage of time and the employment of modern ana- 
 lytical methods, one arrives at the conclusion, based on conviction 
 and not on emotion or political oratory, that the realization of an 
 agrarian reform program is a valuable instrument for economic 
 development. In addition to increasing production and raising the 
 standard of living, it frees its beneficiaries of old shackles and con- 
 
AGRARIAN REFORM 209 
 
 verts them into a responsible and decisive factor in the economic 
 structure o£ the country. The positive aspect of this process is not 
 the breaking of old patterns, but the forming of a dynamic new 
 economic structure, whose objective is not that there should be 
 fewer who have more, but that there should be an ever-increasing 
 number who have more, and that the number of people who share 
 in the rising national income likewise shall be ever larger. 
 
 There is unanimous agreement that agrarian reform should be 
 used as a tool to solve development problems, whether in under- 
 developed countries or not, and the countries that need it are not 
 to be found only in the New World or in the awakening Afro- 
 Asian area. As the working tool that it is, it should be handled with 
 efficiency and impartially, using foreign experience where advisable 
 but refusing to tie ourselves to rigid norms or principles that have 
 been tried (successfully or not) in other countries. There is no 
 imaginable single solution for the agrarian problems of all countries. 
 Every plan must be adapted to local conditions, and this frequently 
 leads to highly flexible solutions. 
 
 In any event, the goal is to incorporate into the economic develop- 
 ment of the country a large segment of the population which at 
 present stands for nothing as a factor in consumption, and for 
 little or nothing in the use of services supplied by the working 
 sector of the community. Unfortunately, this segment continues 
 to vegetate marginally, outside national life, with multiple needs, 
 with large families, and with a complete lack of education or 
 purchasing power. 
 
 The only way of coping with the problem is to settle the peasant 
 in such a way that his land becomes a means of production and 
 not a last refuge. It is indispensable that his effort, also, should 
 contribute effectively to national income. He must lift his pro- 
 ductivity, a step that could be obtained, in the first phase, by pro- 
 viding him with the means of utilizing his present work capacity 
 to the full. Those means are not necessarily always a tractor and 
 a large farm; because of the peasant's lack of experience in handling 
 modern tools of production, the acquisition of machinery and a 
 large area to cultivate more often than not requires, in turn, the 
 creation of large and complex orgariizations to work the land 
 effectively. 
 
 There is a whole series of traditional farming activities, for whose 
 products there is a ready market, in which it would be much more 
 prudent to employ his present skills and knowledge, leaving to 
 
210 The Caribbean : Venezuelan Development 
 
 modern education the task of training his sons into more skilled 
 workers, who in the near future with their knowledge of the tools 
 that modern technology puts at their disposal, will be able to per- 
 form highly valuable work on the farm, in industry, or in the 
 services that contribute to modern civilization. 
 
 This can be achieved with a minimum of planning, and there 
 is no intention in this suggestion of undermining the agrarian re- 
 form plan; on the contrary, such a step would save it from failure, 
 and the important thing is that it should succeed. 
 
 In spite of its difficulties and its demands on us, we can con- 
 fidently state that the task we face is feasible. The existing agrar- 
 ian reform law provides the legal means and establishes precepts 
 of a social nature that fit perfectly into our proposal, which is 
 aimed at increasing the real income of the rural population. 
 
 It would be possible to analyze the plans formulated by the 
 government through the Coordination and Planning Office, the 
 Ministry of Agriculture, the National Agrarian Institute, the Agri- 
 cultural & Livestock Bank, and, particularly, the Plan of the Na- 
 tion, and to mention their weak points, in order to strengthen them 
 and to prevent them from becoming insurmountable obstacles. At 
 the same time, the necessary incentives and instruments, now lack- 
 ing, could be created so that we could proceed with all the means 
 available to us, and through all effective channels, to wage a tre- 
 mendous battle against time and against agricultural backwardness. 
 We would thus succeed in integrating the rural population into the 
 national economic process, and those who remain on the land 
 would do so of their own volition, not because they have to, but 
 because they want to raise their standard of living, not because all 
 other roads, except that of vegetating in permanent underemploy- 
 ment, are closed to them, but because they have a keen interest in 
 securing a better life from the land. 
 
 IV. Conclusion 
 
 Venezuelan agricultural production can be increased, creating 
 new jobs, improving our balance of payments, and increasing per 
 capita income of the rural population. These benefits would be 
 reflected in increased purchasing power and in an expansion of the 
 market for Venezuela's incipient industry. It is reasonable to assume 
 this would contribute to greater political and social stability. 
 
 The essential elements— land, manpower, and a domestic market— 
 
AGRARIAN REFORM 211 
 
 are already available and the only thing lacking, in addition to ade- 
 quate financing, is the firm and unswerving decision to proceed with 
 energy and determination to solve our agrarian and development 
 problems. 
 A sound plan of procedure would be: 
 
 a. The social and economic consolidation of the farm colonies 
 already established by the government. 
 
 b. Planning rapidly and effectively, the immediate and future 
 work that must be done by the National Agrarian Institute, on the 
 basis of experience to date and taking into account regional socio- 
 economic factors but not in such a way that it will cause bureau- 
 cratic delays in the useful realization of the agrarian reform pro- 
 gram. 
 
 c. Consolidation and stabilization of the position of the farm 
 owner who is fulfilling the social function of land ownership. 
 
 d. Expansion of present agricultural credit sources: 
 
 1. Assigning all resources of the Agricultural and Livestock 
 Bank to farm credits. 
 
 2. Establishing a new banking organization with official, 
 private, and international resources to finance the so-called entre- 
 preneurial sector, on both a short- and long-term basis. 
 
 e. Improvement of the present marketing system for farm 
 products. 
 
 f. Subsidization of farm exports not only as a means of earning 
 foreign exchange but to create new, well-paying jobs. 
 
 g. Introduction of new crops that can compete in foreign markets 
 and intensification of existing crops that are already competitive. 
 
 h. A program of planting trees whose wood can be used in the 
 manufacture of paper pulp, not so much to save foreign exchange 
 as to carry out a sound reforestation policy, and to provide jobs 
 for those people who now inhabit the "poverty belts" around Ca- 
 racas, Maracay, Valencia, and Puerto Cabello. 
 
 To contribute to the agricultural development of any country 
 is always a meritorious and praiseworthy work, whose benefits will 
 endure through the ages; to contribute to the agricultural develop- 
 ment of Venezuela is all that and much more, a titanic task because 
 of the difficulties inherent in the land and in the people who work 
 it. It is still more. It is a labor of human and social conquest on 
 behalf of man himself, on the altars of individual freedom, of free- 
 dom of thought, and of the realization of our highest efforts on 
 behalf of a free and sovereign people. 
 
Victor Manuel Gimenez Landinez : objectives and 
 
 REQUIREMENTS OF AN INTEGRAL AGRARIAN REFORM 
 
 X\S PRODUCTS o£ the fusion of different races, we Venezuelans 
 are united in the past by a traditional love for liberty and by the 
 struggle and sacrifice to obtain it, and today and in the future by 
 the conviction of common duty and destiny: the struggle for a 
 world in which the ideals of social justice, political liberty, and 
 economic prosperity will be a reality. 
 
 We shall have to overcome, however, great difficulties to obtain 
 the conquest of these goals and ideals. But there is no doubt 
 that only by redeeming the immense rural population which in- 
 habits this mestizo continent from its backwardness and from the 
 inhuman standard of living at which it has lived for centuries, shall 
 we have the right to speak of progress, of justice, and of liberty. 
 
 The rural population of Latin America, with its 180 million 
 people, represents 54.2 per cent of its population. But it is an im- 
 mense human mass, dispersed in a big, almost empty territory. The 
 total population of Latin America represents hardly 6 per cent of 
 the world population, with a demographic density of 8 inhabitants 
 per square kilometer, whereas Asia has 54 and Europe has more 
 than 80. The rate of growth is quite high; so high, that some, 
 blinded by the enormous development problems they bear, have 
 begun to consider the necessity of its reduction by birth control, 
 which signifies collective suicide; for no one should question that 
 the primary element for the development and magnitude of a nation 
 is its population increase. This should not induce us to assume 
 pessimistic attitudes, but it should make us understand the 
 
 212 
 
AGRARIAN REFORM 213 
 
 immense task before us and stimulate us to act with the efficiency 
 and urgency that the moment requires. 
 
 This, as is stated, applies especially to the rural sector, where, 
 more than in any other, there exists an extreme urgency to attain 
 a high level of development: (1) because it is the most backward 
 and depressed sector, (2) because it is, and will be for some time, 
 the sector with the largest active population, (3) because the in- 
 dustrialization process can not yet reach levels which will permit 
 the absorption of the rural population, and (4) because it is the 
 sector in which the population growth is the greatest. 
 
 To attain a just and true development of the rural sector, to re- 
 deem it from its backwardness and misery, to attain for its members 
 a higher level of income and purchasing power, to attain a total 
 transformation so that "the land be for the man who works it, the 
 base of his economic stability, the foundation of a progressive social 
 welfare, and a guarantee of liberty and dignity which he deserves 
 as a human being": this is what in Latin America is called Integral 
 Agrarian Reform, a motto and a banner to whose appeal these na- 
 tions answer, searching for a better future. 
 
 /. Objectives of the Integral Agrarian Reform 
 
 Venezuela, a nation in development, has understood that, without 
 this integral agrarian reform, it could never attain its goal of a 
 true and stable development. The industrialization process itself 
 requires as a basic support, a prior or, at least, a simultaneous agri- 
 cultural development, not only because agrarian reform and the 
 livestock and agricultural development are a key to the better dis- 
 tribution of income and to a greater political and social stability, 
 but because, without the incorporation of this third part of the 
 population into the consumer market, the true demand necessary 
 for the stabilization of investments in industry could not be 
 achieved. It is also the only way in which the shift of the agricul- 
 tural population to the industrial sector could be attained, not only 
 due to an abandonment of the rural area, but because of a need for 
 industrial workers. 
 
 To this effect the Integral Agrarian Reform of Venezuela de- 
 veloped two objectives: one, inspired in social justice, was to achieve 
 a better distribution of the land, that, although immense and 
 empty in the plains and in the Guayana, was concentrated among 
 a few in the central and populated regions of the country, produc- 
 
214 The Caribbean : Venezuelan Development 
 
 ing the double phenomenon of excessively large landholders and 
 extremely small landholders, equally harmful. A graph of the 
 ownership of land (in the Agricultural Census of the country) shows 
 that in 1956, 74.45 per cent of the agricultural hectares were 
 in the hands of 1.68 per cent of owners (or who possessed agricul- 
 tural enterprises) with farms larger than 1,000 hectares, while 
 80.64 per cent of the landowners had only 3.79 per cent of the area 
 distributed in small farms with an average of 3 hectares per farm, 
 with the natural consequences of the absentee landlords and in- 
 direct cultivation of the land on one hand, and backwardness, small 
 investment, untechnical practices, low rentability, nomadism, and 
 anticonservationist habits on the other. Moreover, of the 398,000 
 "units of agricultural exploitation," as they are called in the Agri- 
 cultural and Livestock Survey of 1956, only 100,000 held title to 
 the land; 103,800 were tenants or sharecroppers or partners who 
 worked another's land, paying rent usually to absentee owners, 
 and 194,023 were precarious occupants of lands without title, which 
 makes us assume they worked public or semipublic land. 
 
 From the economic point of view, the situation may be summed 
 up as this: only a small part of our arable agricultural area was 
 actually under cultivation, while the greater part remained without 
 cultivation as unimproved grasslands, brushlands, or fallow land. 
 This brought about a great delay in production and a void of 
 interest in productivity to such a degree that, dominated by an oil 
 economy, we considered it easier to import food products than to 
 produce them; and we had been converted practically into a food 
 importing country whose monetary outflow for this concept alone 
 represented Bs.600 million in 1957. 
 
 More than any place else, the agrarian reform in Venezuela could 
 not be content with the archaic criterion of a simple distribution of 
 land. For this reason we are trying to achieve an integral agrarian 
 reform which comprises not only the distribution of the land, but 
 also the special type of credit which agriculture needs and deserves, 
 the technical assistance necessary to obtain the high yields, and a 
 marketing system that guarantees the sale and price for the prod- 
 ucts of the field, without which an increase of income for the farmer 
 would not be assured. The agrarian reform, thus conceived, on 
 solid legal bases, not only recognizes the right of ownership of the 
 land for the men who work it, but all that which is indispensable 
 to make it produce, so that by maximum production the farmer 
 may obtain adequate remuneration to satisfy his necessities and 
 
AGRARIAN REFORM 215 
 
 those of his family. This legal concept, which recognizes these basic 
 rights of the farmer, land ownership, agricultural credits, technical 
 assistance, a guaranteed market, sets a guide within this new branch 
 of law which, under the name of agrarian law, asserts in the world 
 today its great and enlightening content. 
 
 The objective of our agrarian reform is not a simple increase in 
 production, nor any special production goal, nor a simple and cold 
 redistribution of land. The objective of our agrarian reform is the 
 welfare of the man who works the land, defined as progress, justice, 
 independence, and liberty for the man who lives from the land. On 
 this basis, the Venezuelan land reform does not urge the disappear- 
 ance of private property nor its liquidation by means of socialist 
 or communist processes. On the contrary, it seeks to democratize 
 the property, that is to say, to make it available to those people 
 who live and work directly on the land and, for that reason, its 
 basic objective is to create the largest number of agricultural 
 landowners; there will be less proletarians, and this will strengthen 
 the rural middle class so that it may become a factor in the sta- 
 bility, continuity, and social progress of our country. 
 
 //. Characteristics of the Venezuelan Law 
 
 Venezuelan agrarian reform does not set a mathematical limit 
 on landholding because it considers agriculture a depressed area of 
 the economy, and, rather than limit the efforts of man, it should 
 stimulate man to dedicate himself to the land and to remain on 
 the land. For this reason, the only limitation set on private owner- 
 ship of land by the Venezuelan agrarian reform is the fulfillment 
 of a social function, demarked in our law principally by the fact 
 that the land should produce efficiently and should be cultivated 
 directly by the owner; that is to say, that it is not being exploited 
 by indirect systems of tenants, sharecroppers, or partners, systems 
 that have been the source in Latin America of great social in- 
 justices, since through these condemnable practices, for centuries, 
 man has been exploiting man. It is also in the spirit of the law 
 that in areas of great demographic concentration where there is 
 a necessity for land for the farm population with no other means, 
 the expropriation of some farms, even if they are being cultivated 
 by the owners, may take place. However, this is an exceptional case 
 and is carried out with a special type of indemnification. 
 
216 The Caribbean : Venezuelan Development 
 
 ///. First Results 
 
 The process of execution of the reform is promoted, in accord- 
 ance with the law, by the farmer himself who requests land at the 
 Institute created by the government, which, after analyzing the 
 situation makes the decisions pertaining to the expropriation and 
 redistribution of farms. Up to December, 1961, farmer organiza- 
 tions had made requests representing 84 thousand farm families 
 who had worked on another's land and who hoped for ownership 
 of land. Up to the present, land has been granted to 53 thousand of 
 these farm families who as tenants in danger of eviction constituted 
 the sector most urgently in need of the reform. At the present 
 moment, the National Agrarian Institute is working to attain the 
 consolidation of these families on the land which has been 
 granted to them by means of the realization of basic works such 
 as irrigation canals, electrification, rural education, housing, and 
 rural aqueducts; and at the same time, by means of loans and 
 technical assistance, initiating plans for production to achieve the 
 goals which serve as a base for an increase in the farmer's income. 
 Already, in this year of 1962, the first massive educational plan in 
 modern methods of cultivation of an agricultural product took 
 place; in this case corn was selected, a well-known crop by tra- 
 dition to our farmers. Fourteen thousand farmers, family heads, 
 received this type of teaching on their own land. Utilizing these 
 methods, they achieved in a total of 70 thousand hectares— distribu- 
 ted among 12 states of our country— more than 100 per cent increase 
 in yield per hectare. This program, called the Corn Production 
 Program, increased the production of this grain in such a way that, 
 in spite of an increasing demand, it will prevent importation and 
 completely guarantee the necessities of the internal market. It also 
 established a new method in extension work and in agricultural 
 loans, which combine production, productivity, and income. Be- 
 cause of this, new plans have begun with sesame and cacao, to 
 form the base for a profound transformation of the man in the 
 country into a true farmer— the key to the success of any well-under- 
 stood agrarian reform. 
 
 This process of agrarian reform— whose principle is the social 
 function of the land— has permitted, or at least has not impeded, 
 the achievement of all these levels of agricultural production and 
 has reduced the imports and the monetary outflow for this concept. 
 In 1960, the first year of the agrarian reform, the landowners. 
 
AGRARIAN REFORM 217 
 
 stimulated by the legal fact that guarantees respect for private 
 property (if under cultivation by them), and the farmers by a 
 special development of agricultural credit, helped to achieve an 
 increase of 21 per cent of the area cultivated in the country; and, 
 although the productivity decreased some, agricultural production 
 rose in an exceptional manner at a rate of 10 per cent, as compared 
 to the average for the ten preceding years. During 1961, although 
 the levels of productivity improved, those of production were lower 
 because corn, the main internal agricultural product, was affected 
 by a great drought during that year. 
 
 Today both agricultural production and productivity have 
 entered into a process which can be considered as a definite re- 
 covery and ascent. Until two years ago one million eggs were im- 
 ported daily, but today importation of eggs has been abolished 
 and we even have faced some surplus problems. The production 
 of tobacco not only increased in quantity and yield per hectare, 
 but also the quality of the product improved, so that, after more 
 than a hundred years of absence from international markets, we 
 have begun to sell our surplus to some European countries. It is 
 necessary to observe that two years ago there were large impor- 
 tations of tobacco in Venezuela and that today even North Ameri- 
 can brands of cigarettes are made in Venezuela with local tobacco. 
 We have had a magnificent harvest of coffee and have achieved a 
 level of self-sufficiency in rice, potatoes, cotton, corn, and others, 
 and have had a notable increase in the production of sesame, 
 tubers, etc., as well as an increase in production in the quality and 
 yield of beef, pork, and fowl. There has been a notable increase 
 in the production and exportation of fish and sea foods, especially 
 shrimp. As this year ends, we may estimate very accurately that 
 the growth rate of the agricultural product will be 7 per cent as 
 related to last year, and not only in production, but in productivity, 
 we may say that it has reached the highest level in the history of 
 our agriculture. 
 
 IV. Future Problems 
 
 However, great problems appear anew on the horizon and pre- 
 sent questions which should be answered with certainty if we 
 wish to guarantee the success of economic development, especially 
 the agricultural development, not only in Venezuela but in many 
 Latin American countries. Founding ourselves concretely on the 
 
218 The Caribbean : Venezuelan Development 
 
 Venezuelan experience, we may say that the course is clearly set as 
 to investigation, agricultural extension, services, and investment in 
 infrastructure, including in the field of irrigation plans being 
 carried out by the integral agrarian reform which will signify an 
 increment in the irrigated zone of the country of close to one million 
 hectares within the next years. 
 
 The foregoing has been realized and achieved with our own re- 
 sources, now over Bs.2 billion, without any foreign aid. Just re- 
 cently several loans have been approved which will permit us to 
 attempt our programs and projects, since decided upon, such as 
 those of supervised agricultural credit at medium terms, the consoli- 
 dation of farm communities, livestock credit, and others. A prob- 
 lem to be solved is the marketing of agricultural products. We dare 
 say at this moment that the limiting factor for agricultural and 
 livestock development may be the marketing factor. Evidently, even 
 in countries with great agricultural and livestock deficits in the past, 
 as Venezuela, which had abandoned themselves as an agricultural 
 or forestry country, the level of self-sufficiency is relatively easy to 
 attain. Much more difficult is the solution to marketing problems 
 and, above all, to have clear ideas when confronted with the 
 problem of surplus. I should like to make special account of this 
 matter in the hope that it may be useful, not only to nations like 
 us at this stage of development but also to the United States, who 
 are sincerely interested in understanding Latin American reality 
 and the opinion of those who have the responsibility of leadership. 
 
 It is evident that the principal goal of Latin American govern- 
 ments is to level out the demographic growth and the rate of eco- 
 nomic development. This task is made even more difficult, as we 
 mentioned before, because of the demographic explosion on this 
 continent with its average population growth of over 3 per cent. 
 This is even more evident in Venezuela whose demographic rate, 
 according to a report between the census in 1941-50, was 3.3 per 
 cent, but which rose to over 3.7 per cent in the decade of 1950-61. 
 Without the existence of proportion between the demographic and 
 economic growth, no one should be surprised by the phenomenon 
 of unemployment, of idleness, or of social decomposition. According 
 to statistics, Venezuela is a country which must create a source of 
 employment for 100,000 persons annually. To add to this burden, 
 this task falls principally on the state, and we must make note 
 that 50 per cent of the population is under 19 years of age. That 
 is, there is a small adult population capable of creating jobs and 
 
AGRARIAN REFORM 219 
 
 a large dependent population that does not create but demands 
 employment. This excessively young population can be explained 
 in our country if you will consider that, due to our oil income, 
 medicine and education reached the interior before development. 
 For this reason, in the new generations, infant mortality was re- 
 duced to low levels by control of death-producing elements; their 
 growth has been very high, while older generations have been re- 
 duced by those adverse factors. 
 
 As you see, the problem is urgent, but if you add to this the 
 fact that growth and development in advanced countries is even 
 greater than ours, you will understand that the principal problem 
 in Latin America is that everything must be done now, urgently, 
 at a great rhythm and with very little accumulated experience. The 
 development of Latin America is dramatic. 
 
 The problem is to know within which sectors of the economy 
 these sources are to be created and whether they can be created 
 rapidly to bring us to full employment. Extraction industries are 
 not worth considering, because we know that they require very 
 little labor. The petroleum industry in Venezuela, which con- 
 tributes 28 per cent of the gross national revenue, employs hardly 
 2 per cent of the active population of the country. It is true that 
 heavy industries and manufacturing require many workers, but the 
 time required to establish these industries is not as short as would 
 be desirable. They are limited by the necessities of planning and 
 programming, by the specialization and preparation of the trained 
 worker, by shortage of means for large investments that require 
 the acquisition of material and machinery, and by problems of 
 marketing. It is also typical of the Latin American problem that 
 the demographic explosion is prior and superior to the industriali- 
 zation process. We may say that Venezuela has lived a premature 
 economy of services that has burdened excessively a budget which 
 is supported by a nonrenewable resource such as petroleum. Thus 
 the transfer of the surplus farm worker today and even more in the 
 immediate future will be difficult to attain as a base for the real 
 demands of industrial development. The rural exodus is higher 
 than industry and services require, incrusting itself principally in 
 official bureaucracy, exerting pressure on the budget, and making it 
 unable to avoid the formation and growth of that new phenomenon 
 which we in Venezuela call a belt of misery that surrounds the 
 cities, represented by an immense mass of farm population which 
 has come to the city in search of work, huddled in miserable huts. 
 
220 The Caribbean : Venezuelan Development 
 
 easy prey in fact, for political adventure and the social decompo- 
 sition preached by the agents of international communism. 
 
 How can this excessive rural exodus be avoided? By decentraliz- 
 ing services and the industrial process? Yes, but it is not enough, 
 for the same phenomenon occurs in the main cities in the interior, 
 and, as we have said before, we have not been able to attain 
 sufficient industrialization, nor is this easy to achieve quickly with- 
 out the risk of doing it artificially and without solid bases. 
 
 V. Demands for the Development of the Agrarian Reform 
 
 Evidently more impulse must be given to agriculture, at least for 
 some time, for it continues to be the principal source of work in 
 developing countries. But the impulse of agriculture, especially 
 to greater yields and productivity, without having attained a great 
 industrial development, brings with it a surplus difficult to place 
 in internal markets as well as international markets. Therein exists 
 a great danger because again agriculture is abandoned, allowed to 
 sink into backwardness, and forsaken at the moment its products 
 are placed on the market. 
 
 To avoid this, it is evident, granting that we must give special 
 impulse to industrialization, that agriculture must not be aban- 
 doned. On the contrary, it must be stimulated and developed. 
 To this effect amplification of the consumer market for agricul- 
 tural products is indispensable, as is a guarantee that they will 
 be assured a market, be it national or international. In Venezuela 
 we may truly say that we should not speak yet of overproduction, 
 but of underconsumption. There is a great mass of population that 
 does not consume for lack of acquisitive power. It is the same 
 human mass that lives in the countryside for lack of an integral 
 agrarian reform or which lives in misery around the cities for 
 lack of sufficient growth in the industrial process. 
 
 How can we place these agricultural products, largely perishable, 
 among the underconsumer mass which has not yet the means to 
 acquire these products? We do not believe that a give-away system 
 can be effective. There is no other way than to lower the prices 
 to the level of the consumer's capacity. But this is not always equal 
 to a fair price desired by the farmer; and, although agriculture has 
 increased its productivity, we know that the exchangeable relations 
 between different sectors of the economy unfortunately do not 
 permit the translation of high agricultural yields in proportional 
 
AGRARIAN REFORM 221 
 
 income for the farmer, because the high cost of farm labor, de- 
 ficiency in the credit system, and losses due to a lack of storage and 
 good distribution facilities often raise costs to the farmer, and for 
 that reason he is unable to lower food prices substantially. The 
 cost of labor cannot be reduced, not only because labor organiza- 
 tions impede it but also because their aspirations to obtain a 
 sufficient salary are just, and because they themselves are increasing 
 their acquisitive power. Industry and commerce, which maintain 
 the prices of agricultural machinery, herbicides, and insecticides, 
 might sell cheaper, but it is also true that the demands and obliga- 
 tions to their workers are also great, as is the interest of the in- 
 dustrials in defense of their dividends. In brief, although it would 
 be desirable that the farmer could offer his products cheaply enough 
 to open our markets, it would be at the cost of his own ruin, of his 
 income, and of his ability to improve productivity. 
 
 Thus, if the agricultural producer cannot lower his prices to 
 enable a larger market and if neither industry nor labor reduces 
 its demands which would allow the farmer to produce more cheaply, 
 the only way to break this knot is for a third party, with sufficient 
 power to do so, to promote the amplification of the market, even 
 if it means the transfer of capital from the public sector to that 
 sector with the greater necessity because it is weaker in the defense 
 of its interests and which, at the same time, is the one which pro- 
 duces those foods required by the country. 
 
 This is the agricultural sector, that is, the rural sector. This is 
 even more justifiable if we consider that while executing an ex- 
 pansive program of agrarian reform, of redistribution of the land, 
 this practice of supporting prices benefits not a privileged group, 
 but its humbler classes, the country's producers. To this end, apart 
 from the indispensable and urgent investments in investigation, 
 extension, statistics, livestock sanitation, and indispensable infra- 
 structures, such as irrigation, roads, and rural electrification that 
 the government has realized, it is necessary to do something more. 
 
 VI. "Planting Petroleum" 
 
 In Venezuela, the first Minister of Agriculture, Alberto Adriani, 
 gave us a key to progress when he originated a now famous phrase, 
 "planting petroleum." Venezuela is a country which has paid too 
 high a tax to its own treasury, through its system of oil income, 
 which benefited the fiscal department, but not the nation itself. 
 
222 The Caribbean : Venezuelan Development 
 
 For that reason, it is not strange that at some time the government 
 would assume a policy of special assistance to agriculture, not by 
 direct investment but by those ways which will enable the reduc- 
 tion of the costs of agricultural financing and security for the 
 market price of agricultural products— factors indispensable for a 
 clear appreciation of the actual problematic agriculture of those 
 countries in development, of which a conscientious understanding 
 of its significance is necessary. Old Europe has understood that. 
 Just as at one time agriculture was the mother of all industry 
 whose capital was transferred to impulse industrial development, 
 now it is necessary for the industrial sector to transfer capital to the 
 agricultural sector so that it will not sink nor slip backward in its 
 development. In this way we can explain the magnificent encour- 
 agement, incentive, and privileges that the industrial world in 
 Europe concedes to the agricultural sector, through guaranteed 
 minimum prices, low term loans, tax exemption, and even contri- 
 butions for the acquisition of farm machinery. Here in the United 
 States, where today the desirability of a parity price law is being 
 discussed, a law which obliges the state to spend thousands of mil- 
 lions of dollars to support agricultural prices, perhaps it is neces- 
 sary to admit that, at least for some time, it was the support that 
 the country required for its grand industrialization process. Be- 
 cause, in general, it must be admitted that no country has attained 
 a true and stable industrial development without first having at- 
 tained and guaranteed a great agricultural development. 
 
 The Venezuelan agrarian reform has done a great deal concern- 
 ing the marketing of agricultural products. The National Com- 
 mittee of Marketing sets annually, after serious study, a policy for 
 minimum prices for the protection of the farmer. The National 
 Boards of Production propose a joint plan among the public 
 sector, the industrials, and the farmers, concerning production 
 plans, conditions, reception of fruits, etc. This system has been 
 particularly successful, not only in the defense of prices for the 
 farmer but also in the classification and improvement in the 
 quality of products for industry. In accordance with articles of 
 the agrarian law, farmers have been supported in their aspirations 
 for a better price for their products which they sell to industry 
 and have been assisted in some cases to prevent a drop in prices 
 for products such as sesame, cotton, tobacco, sugar, and milk. The 
 Agriculture and Livestock Bank has made great efforts to fulfill the 
 official policy of minimum prices, as well as storage, conservation, 
 
AGRARIAN REFORM 223 
 
 and distribution of produce; and, to fulfill one of its most important 
 objectives, it has promoted the creation of a new organization called 
 Warehouses for Agricultural Storage (ADAGRO) which will un- 
 doubtedly contribute much to the solution of this problem. 
 
 But we are just opening the door, we are just beginning to walk 
 on the dangerous terrain of self-sufficiency which induces restless- 
 ness and anxiety among rural producers. Will the government halt 
 its action in favor of the rural sector? Will it abandon agriculture 
 to the ordinary channels of financing? Will it continue supporting 
 the budget which agriculture requires? 
 
 Confronted with these questions and by this anxiety which, I 
 am certain, is common or may be common to all our countries in 
 development, there can be only one answer, which will be summed 
 up in this final message. 
 
 At no time should we neglect this integral agrarian reform which 
 the people of Latin America see as a formula for the solution of 
 its great problems. On the contrary, it should receive all the 
 necessary stimulation, all the necessary incentive, to arrive at a 
 level of efficiency and productivity necessary to maintain the de- 
 sired level of employment in the country, to prevent the exodus 
 that, disproportionate to industrial progress, puts pressure on the 
 urban sector and the national budget so that, through this agrarian 
 reform, agriculture may become an efficient instrument in the just 
 distribution of wealth, and a foundation and a lever for a har- 
 monious, stable, and true development. 
 
Armando Gonzalez: agrarian reform, as seen by 
 
 THE labor movement IN AGRICULTURE 
 
 J. O EXAMINE Venezuela's agrarian problem in all its far- 
 reaching complexity would require a large and detailed study 
 containing both the analysis of cause and possible solutions. I 
 shall not attempt this but shall present instead only a brief sum- 
 mary of the over-all problem as seen by the agricultural labor 
 movement. 
 
 /. Origins of the Problem 
 
 The present agrarian problem in Venezuela has its roots in the 
 nature of ownership of the land, which derives from the legal 
 institutions and the usages of the conquest, the colonial period, 
 and the Spanish empire. Among these principles, those of reparti- 
 miento (original land grants by the Crown) and of encomienda 
 (a euphemism for enslavement of the Indians) established the 
 foundations of the economic and social structure of colonial 
 organization which, with minor changes, were carried through into 
 the period of the Republic. These two principles contain the re- 
 lationships in agricultural production that go to make up our 
 agrarian problem. 
 
 Apart from the question of agricultural slave labor, which was 
 solved at the middle of the last century, after a devastating revo- 
 lution that created a state of social and political equality, the 
 legal and economic circumstances of landownership and exploi- 
 tation had undergone no changes. 
 
 224 
 
AGRARIAN REFORM 225 
 
 //. Nature of Latifundism 
 
 Latifundism, or the ownership of vast areas of land, continues 
 preponderant in the agrarian structure of Venezuela. In the eco- 
 nomic aspect, it is characterized by: 
 
 1. The exploitation of man, rather than of the land. 
 
 2. Production of a self-consuming type. 
 
 3. Primitive methods of crop and livestock cultivation. 
 
 4. Utilization of land in an unplanned manner. 
 
 5. Certain feudalistic aspects in relations between landowners 
 and workers, with respect to the owner's obtention of income. 
 
 6. Inefficient marketing practices. 
 
 Its principal social aspects are: 
 
 1. The economic subjection in which it places the peasant (small 
 farmer) and the agricultural laborer. 
 
 2. The miserable living conditions it creates: a very low cultural 
 level, lack of adequate medical care, chronic illness, insect pests, 
 wretched food, irregular family life, and, paradoxically, the growth 
 of families beyond the means of economic support that can be had 
 from the land or from wages. 
 
 A direct effect of the latifundist regime is the small farm (conu- 
 co) of a hectare or more which the sharecropper holds at the 
 pleasure of the landowner. This land is cultivated by primitive 
 methods and usually suffices only for the food needs of the family. 
 
 Our peasant has by tradition been half farmer and half farm 
 laborer. His work has been divided between that on the estate of 
 the landowner and that on his small, uneconomic patch of ground, 
 which, in almost all cases, has been granted him under conditions 
 that keep him and his family at the beck and call of the owner. 
 
 In spite of these conditions, agriculture and livestock were the 
 backbone of Venezuela's economy until the discovery of oil. When 
 the latter took place, there also occurred a complex transformation 
 of our economy. The rural population fled toward the oil fields 
 and toward the city, drawn by the need of labor in the production, 
 refining, and marketing of petroleum and by its allied industries. 
 Agriculture was relegated to a secondary position. Venezuela's 
 currency, the bolivar, became "strong," and it became easier and 
 cheaper to buy food products abroad than to produce them at 
 home. The production of the large estates fell and the profits 
 from agriculture became very limited. 
 
226 The Caribbean : Venezuelan Development 
 
 The new economic bases created new ways of life. In place of 
 the old austere, restricted, and uncertain life, there came another, 
 with its own ways and with its own problems that had to be at- 
 tended to. The country was divided into two clearly defined 
 spheres: that of the people who lived from the new extractive 
 industry, and that of those who vegetated, with difficulty, in the 
 mold of the traditional economy, incapable of satisfying the needs 
 of a more advanced life. 
 
 Agriculture and livestock were increasingly abandoned, and it 
 became steadily more difficult to correct the imbalance and dis- 
 tortion which occurred in these traditional sources of the coun- 
 try's wealth. The concentration of capital, industry, and labor in 
 the cities was not accompanied by a comparable advent of new 
 farming methods nor a change in the age-old relationships between 
 landowner and agricultural labor. 
 
 Agricultural production continued to fall far below the level 
 needed to satisfy national needs, and more than half the population 
 became submerged in a sort of subeconomy. The census of 1950 
 provides eloquent testimony of the dominance of large landholdings 
 in Venezuela, and these figures are reinforced by the 1956 study of 
 the Ministry of Agriculture. 
 
 The 29,250,128 hectares of land under exploitation or ownership 
 in Venezuela are divided into 397,823 farms, 74.75 per cent of which 
 (21,993,630 hectares) belong to only 1.69 per cent of all owners, 
 who have 6,759 farms of more than 1,000 hectares. In contrast, 
 80.64 per cent of production units are of less than 10 hectares, with 
 a total of 1,118,710 hectares divided among 320,790 production 
 units. 
 
 This makes for an average of 3.48 hectares in each of these units. 
 These figures give us the stark reality of our agrarian problem with 
 respect to landownership: overlarge and oversmall holdings. From 
 the economic point of view, this means large areas of land not in 
 production in the large holdings, and nothing but self-consuming 
 production in the small holdings. 
 
 The situation created by these conditions (and by still worse 
 conditions that existed at the time) was brought into sharp focus 
 by the death of the dictator Juan Vicente Gomez in 1935. The 
 country was jolted brusquely into a new era of freedom and open 
 expression. Political leaders who flocked back to Venezuela from 
 exile returned with a new and broader economic and social per- 
 
AGRARIAN REFORM 227 
 
 spective, and they immediately demanded a reshaping of our rural 
 economy through agrarian reform. From 1936 on, peasant unions, 
 associations, and leagues were organized in the countryside, with 
 the supreme goal of obtaining land and of improving working con- 
 ditions. 
 
 The perseverance in that struggle and the pressure maintained by 
 those organizations, together with the liberal, progressive, and 
 democratic ideals of the time, led the government to promulgate 
 an agrarian law which, although it was never applied, constituted 
 a real triumph for progressive forces. 
 
 Then came the movement of October 18, 1945 (the overthrow 
 of the government of Isaias Medina Angarita), which put into 
 power the men who had been fighting for agrarian reform, headed 
 by Romulo Betancourt. For the first time our peasants enjoyed 
 guarantees which were respected. Stability in possession of the 
 land that they worked was one guarantee granted them immediately 
 by the government. Furthermore, large estates seized from criminal 
 speculators were divided and given to the peasants, and credit was 
 extended them by the Agricultural and Livestock Bank, which, 
 from its founding in 1928 up to that time, had granted credit only 
 to large landholders. 
 
 In addition, peasants were elevated to the category of first-class 
 citizens with the adoption of universal, direct, and secret suffrage. 
 The regulation of farm working conditions, which had been on the 
 books many years but had never been enforced, was applied in full, 
 and the working conditions of paid farm labor were immediately 
 improved. The farm labor movement acquired unprecedented 
 vigor, and the Peasant Federation of Venezuela was established 
 in June, 1947. In 1948, Congress passed a new agrarian law, setting 
 up the National Agrarian Institute and more advanced conditions 
 for the working peasant. Unfortunately, a little more than one 
 month after this law had gone into effect, a military coup ousted 
 the government of Romulo Gallegos, and with it disappeared the 
 possibility of the law's application, for the new government repre- 
 sented the interests of the oligarchy and the large landholders, and 
 it based its power on the subjection of urban and rural labor to 
 greater and more efficient exploitation. 
 
 The agrarian law of 1948 was annulled by the dictatorship in 
 1952 and replaced by an agrarian statute which legally condoned 
 the abuses and arbitrary actions being committed against the 
 peasants. The farms that had been handed over to the latter were 
 
228 The Caribbean: Venezuelan Development 
 
 seized, their credit was stopped, and the regulation of farm working 
 conditions once more was abandoned. Peasant leaders paid for 
 their spirit of resistance in prison and concentration camps until 
 the fall of the dictator Perez Jimenez in 1958. On January 23 of 
 that year, with the new democratic era, there was a revival of peas- 
 ant organization. Their unions and leagues once more made their 
 voice heard in the forum of the masses that were repressed but 
 never dominated by the dictatorship. The injustices they had 
 suffered during almost ten years of iron rule and the miserable eco- 
 nomic situation in which they had been placed led to a series of 
 excesses in the struggle to regain their rights. They invaded farms 
 which they had formerly owned, and they returned, without due 
 authorization, to the land they had occupied before, from which 
 they had been ejected by inhuman landlords. The general political 
 situation of the country was reflected directly in this 45 per cent 
 of the population which sufiEered the worst possible living condi- 
 tions. Agrarian reform was postulated immediately as the only so- 
 lution to the nationwide problem. The provisional government, on 
 September 26, 1958, issued a decree which established an Agrarian 
 Reform Commission that was instructed to draw up a draft of a 
 new agrarian reform law. The commission did its job, and the 
 Minister of Agriculture of the present government duly presented 
 the draft to Congress. After study by a special committee and after 
 prolonged discussion and emendation, the present agrarian reform 
 law came into being. With proper solemnity and in an atmosphere 
 of intense emotion, it was promulgated by President Betancourt 
 on the immortal battlefield of Carabobo. 
 
 In the discussion of the law, there was more than the mere ques- 
 tion of a new legal measure; an honest and sincere attempt was 
 made to deal with and to try to find a solution to a deep socio- 
 economic problem aggravated by political factors. The attempt 
 included efforts to exclude the expression of the interests of any 
 particular sector and to give the law the character of a national 
 undertaking to meet a fundamental problem toward whose solution 
 the entire community contributed. 
 
 If we take as our point of departure the following admitted 
 problems, there is no need to justify the agrarian reform: 
 
 1. The subhuman conditions in which our peasant lives. 
 
 2. The obstacle which extremely low purchasing power offers to 
 our industrialization. 
 
 3. The deficit in our agricultural production. 
 
AGRARIAN REFORM 229 
 
 Perhaps the gravest of these problems is the second one listed, 
 the extremely low purchasing power of the great mass of our rural 
 population. According to recent studies, the annual income of 20 
 per cent of rural families is Bs.400 and for another 13 per cent is 
 only Bs.800. For an additional 14 per cent, income can be measured 
 only by the meager production necessary to keep body and soul 
 together. 
 
 In view of these circumstances, our farm organizations have had 
 to establish a criterion and coordinate their efforts so that the 
 agrarian reform would not be limited to a mere agricultural re- 
 form with the sole objective of overcoming the production deficit 
 through the use of modern techniques and tools in crop cultivation. 
 If this had happened, the misery and general living conditions of 
 45 per cent of our population would have continued the same as 
 before or worse. 
 
 The relationships between peasants and landowners would 
 merely have been replaced by a new set of relationships between 
 landowners and salaried workers. The country would have been 
 freed of the necessity of importing food, but the market would have 
 continued to be confined to the same population and the growth 
 possibilities of industry would have been hamstrung by the lack 
 of rural purchasing power. 
 
 The agrarian reform law assigns a social function to landowner- 
 ship, and the right to hold land is subject to this condition. It is 
 also drawn to conform to the current social process of Venezuela 
 and to its basic economic goals. The introduction to the law ex- 
 presses with utter clarity the philosophy which inspired it, and its 
 first article specifies its basic objectives. 
 
 ///. Agrarian Reform Action 
 
 The National Agrarian Institute (NAI), which has received ap- 
 proximately 100,000 requests for land grants, has carried out the 
 following program: in 1959, before the agrarian reform law was 
 actually promulgated, 5,874 families were placed on farms with a 
 total area of 460,769 hectares. That year, Bs.31 million were spent 
 in the development of these farms, and an additional Bs. 1,0 15,8 18 
 in the acquisition of four large holdings. In that year, the chief 
 activity of the NAI was dedicated to colonization and settlement, 
 and the greater share of the land that was handed out belonged to 
 the government or had been seized from dictatorship criminals. 
 
230 The Caribbean : Venezuelan Development 
 
 In 1960, the first year of the actual operation of the agrarian 
 reform law, a start was made on legal action against the latifundist 
 structure, and 159 privately-held farms were acquired. They had a 
 total area of 279,231 hectares and a value of Bs.108 million. Of 
 this sum, more than one-third was paid in cash and the remainder 
 in bonds of the agrarian fund. During the year, 25,221 families 
 were settled on a total land area of 743,933 hectares. 
 
 In 1960, 113 holdings were acquired, with an area of 132,543 
 hectares and a value of Bs.82.2 million. The number of families 
 settled was 11,074, on an area of 156,089 hectares. As will be noted, 
 the number of settlements and the area of land distributed both 
 declined, which was due to the fact that the supply of favorably- 
 located government-owned land and land confiscated from repre- 
 sentatives of the former regime had been exhausted. Investments 
 in land improvements and development in 1960 amounted to 
 Bs.42.1 million. 
 
 Through September of this year, 11,816 families have been set- 
 tled on farms with a total area of 210,804 hectares; this area 
 formerly made up 114 farms which were purchased for the reform 
 program. It should be noted that 1,300 families were established 
 on the land contained in 12 farms that were donated by the 
 Compania Shell de Venezuela. 
 
 Since the start of the agrarian reform program, 53,985 families 
 have been settled on farms. Many of these families already have re- 
 ceived the deeds to the land, while others have received only provi- 
 sional title as part of a collective deed turned over to provisional 
 land committees, in accordance with Title 1 1 of the law, referring to 
 land distribution. The total area in hectares distributed to date 
 is 1,576,495. 
 
 Land distribution plans for the remainder of 1962 call for the 
 establishment of 4,241 families on 47,595 hectares. If these plans 
 are carried out, it will mean that by the end of this year 58,226 
 families will have been settled on 1,624,080 hectares. Through 
 July 31 of this year, 126 private farms, containing 113,632 hectares 
 and worth Bs.41.3 million, had been acquired, and investments in 
 improvement and development of the new farms totaled Bs.41.3 
 million. 
 
 The social conditions that prevailed when the agrarian reform 
 was set up have had an important effect on the execution of the 
 law, due to the necessity at the time for acting with great speed in 
 a manner that did not permit adequate planning. The urgent need 
 
AGRARIAN REFORM 231 
 
 was to create confidence among the peasants that the government 
 was going to change the living conditions which had forced them 
 into a state of rebellion, uncertainty, and social unrest. And the 
 only way of doing this was to get them on the land quickly and to 
 provide them with the economic facilities, such as loans, which 
 would enable them to meet their pressing needs. If this had not 
 been done, we would not now enjoy the position of being able to 
 improve what has been done and to plan what remains to be done, 
 because there would have ensued a situation of chaos whose results 
 and consequences it was impossible to foresee. 
 
 There are many constructive aspects in what has been done under 
 the agrarian reform to date: 
 
 1. Establishment of an atmosphere of law and order based on 
 faith in the democratic and constitutional government. 
 
 2. The distribution of 1,576,495 hectares of land by the NAI. 
 
 3. The credit policy of the Agricultural and Livestock Bank 
 which now has loans outstanding of Bs.80 million to peasants and 
 of more than Bs.70 million to large farmers. 
 
 4. Organization by the NAI of farm implement service and of 
 technical and administrative assistance to the new settlements. 
 
 5. The organization of production and service cooperatives. 
 
 6. The opening of thousands of kilometers of secondary and ac- 
 cess roads by the NAI and the Ministry of Agriculture. 
 
 7. The construction of hundreds of houses by the NAI and the 
 Rural Housing Division of the Ministry of Health and Social Wel- 
 fare in rural population centers. 
 
 8. Farm extension services which have provided knowledge of 
 the most modern farming techniques and crop cultivation to the 
 new farmers. 
 
 9. The provision of higher yielding selected and hybrid seeds. 
 
 10. Expansion and increase of agronomic instruction centers for 
 extension agents and the creation of practical agricultural and 
 mechanized schools. 
 
 11. The broadening of the domestic market for consumer goods, 
 with all the favorable implications that this holds for industrial 
 development. 
 
 12. A national awareness of the need for carrying out agrarian 
 reform so as to raise production indices and overcome the deficit 
 of agricultural output. 
 
 13. Success in the campaign against illiteracy. 
 
 14. A higher level of health through improved living conditions, 
 campaigns in favor of better health conditions, elimination of ma- 
 laria, rural health services, and other aids to better health. 
 
232 The Caribbean : Venezuelan Development 
 
 15. The integration of the farmer into the country's social proc- 
 ess through education by his own organizations and by extension 
 services and through participation in community development 
 projects in which official agencies furnish needed materials and 
 the farmer does the work. 
 
 16. The maintenance or relative improvement of productivity 
 on both a national and per unit scale. 
 
 17. The installation of modern irrigation systems. 
 
 I would like at this point to comment on the 1960 and 1961 
 annual reports of the Central Bank, one of the most authoritative 
 sources of economic information in the country. According to the 
 reports, in 1959-60 there was an increase of 21 per cent in land 
 under development and a production increase of 13 per cent; thus, 
 ostensibly, there was a decrease of 8 per cent in productivity. Al- 
 though technically correct, this is misleading because not all the 
 land that was acquired could be put into production. During that 
 year, much of the land acquired by the NAI in the agrarian reform 
 program could not go into production immediately for one or more 
 of the following reasons: 
 
 1. The land could not be cleared of trees. 
 
 2. It was turned over at an inopportune time for cultivation. 
 
 3. There was a lack of machinery to work the land. 
 
 4. There was not sufficient time to turn the land over to the 
 peasants. 
 
 5. Some normally cultivated land was under floodwater that 
 year. 
 
 In addition, the credit resources of the Agricultural and Live- 
 stock Bank were inadequate to satisfy all loan requests from peas- 
 ants and from large farmers, which further reduced the area in 
 cultivation. Furthermore, agricultural production is now much 
 more widely dispersed and many farmers handle distribution and 
 marketing without processing their production through reception 
 centers, which makes an accurate tabulation of farm output more 
 difficult. 
 
 This view is supported, in some degree, by the 1960-61 report 
 of the bank, which in its analysis of agricultural production points 
 out that, although production was down 2 per cent from the previ- 
 ous year, there was no decrease in productivity because "the reduc- 
 tion in the area harvested (8 per cent) was greater than the drop in 
 production." Thus, although absolute production was down 2 per 
 
AGRARIAN REFORM 
 
 233 
 
 cent, relatively, production increased 4 per cent. It should also be 
 noted that although agricultural production as such was off 2 
 per cent, combined agricultural-livestock production increased 3 
 per cent, according to the report. 
 
 The sharpest drop was in leguminous grains, where production 
 fell 44 per cent, but this was due to weather and not to the agrarian 
 reform. There was a marked increase in the production of crops 
 related to industry, a reflection of the stimulus which industrializa- 
 tion is giving agriculture through the creation of stable markets. 
 In this connection, the following table is of interest: 
 
 TABLE 1 
 
 AGRICULTURAL PRODUCTION 
 
 (metric tons) 
 
 
 
 
 
 Change 
 
 
 1961 
 
 1960 
 
 1959 
 
 1960-61 
 
 Rice (in husk) 
 
 80,658 
 
 71,862 
 
 38,586 
 
 12.2% 
 
 Corn 
 
 419,508 
 
 439,440 
 
 336,459 
 
 -4.0 
 
 Yucca 
 
 534,839 
 
 340,248 
 
 217,857 
 
 57.2 
 
 Sesame 
 
 24,868 
 
 24,868 
 
 16,267 
 
 
 
 Cotton (unginned) 
 
 36,380 
 
 24,947 
 
 28,377 
 
 45.8 
 
 Copra 
 
 10,775 
 
 7,742 
 
 5,427 
 
 39.2 
 
 Peanuts (unshelled) 
 
 1,176 
 
 1,587 
 
 1,387 
 
 -25.9 
 
 Sisal 
 
 10,093 
 
 9,993 
 
 6,743 
 
 1.0 
 
 Tomatoes 
 
 65,889 
 
 49,340 
 
 58,753 
 
 33.6 
 
 Cocoa 
 
 9,051 
 
 8,485 
 
 12,073 
 
 6.7 
 
 Coffee 
 
 53,502 
 
 55,072 
 
 58,753 
 
 -2.9 
 
 Sugar Cane 
 
 2,369,265 
 
 2,133,758 
 
 
 11.0 
 
 Brown Sugar 
 
 44,692 
 
 44,505 
 
 53,091 
 
 .4 
 
 Tobacco 
 
 10,360 
 
 9,222 
 
 6,215 
 
 12.3 
 
 As may be seen, in ten of these products of first-line importance 
 in the food industry, there was an average production increase of 
 20 per cent, an average decrease of 10.9 per cent in three of them, 
 and the other remained unchanged, making for a net improvement 
 of 9.1 per cent. It might be said that the analysis is incomplete, 
 since not all products are listed, but my point is to show that there 
 has been a substantial increase in basic agricultural production, 
 favorable to industrialization and to the progress of the agrarian 
 reform program. In the complete list of products, there was a 
 production increase in 15, a decrease in 14, and one of them (sesa- 
 me) was unchanged. 
 
234 The Caribbean : Venezuelan Development 
 
 IV. The Asricultural & Livestock Bank 
 
 The case of the Agricultural and Livestock Bank provides a good 
 example of the way in which the agencies employed in the agrarian 
 reform program come under constant review, with an eye to chang- 
 ing, correcting, and improving their operation. During the first 
 year of the program, the bank operated under heavy pressure from 
 many factors: lack of proper planning in granting of loans, lack of 
 trained personnel, problems which were outside the bank's realm 
 but which had to be dealt with, lack of repayment by loan re- 
 cipients, and others. As a result, the bank was brought to the verge 
 of a crisis. It was reorganized completely and is today a solvent 
 organization which, this year, has extended a greater amount of 
 credit than in any previous year, although this still has not been 
 sufficient to meet the demands on it for loans. Its loan operations 
 are detailed below. 
 
 
 
 TABLE 2 
 
 LOANS EXTENDED 
 
 (000 of Bs.) 
 
 1 
 
 
 Recipients 
 
 1959 
 
 1960 
 
 1961 
 
 1962 
 (1st 9 months) 
 
 Large farmers 
 Peasants 
 
 75,100 
 56,871 
 
 43,400 
 75,518 
 
 45,200 
 70,934 
 
 68,010 
 70,038 
 
 In the period since September 30, loans to large farmers in 1962 
 have gone over Bs.70 million and loans to peasants have approached 
 Bs.80 million for the year. 
 
 To conclude my presentation, I would like to set forth the 
 criteria that guide the federation and its membership. In our view, 
 the agrarian reform program is a national undertaking in which 
 the government is making an investment to achieve the following 
 objectives: 
 
 1. To raise to the status of efficient producers and landowners 
 the more than 38 per cent of our population that is made up of 
 peasants who were formerly subject to inhuman and unjust social 
 and economic conditions. 
 
 2. To convert this part of our population, which formerly vege- 
 tated in a kind of subeconomy, into a stable market for consumer 
 goods, which will make possible our industrial development. 
 
 3. To cut the costs of agricultural production. 
 
AGRARIAN REFORM 235 
 
 4. To supply, through abundant, low-cost production, the food- 
 stuffs for the population and the raw materials for industry that 
 will satisfy domestic demand and remedy the existing deficit. 
 
 5. To avoid the expenditure of foreign exchange spent on con- 
 sumer goods and to divert it to the purchase of capital goods that 
 will speed up the industrialization process. 
 
 6. To contribute to the general raising of living standards, par- 
 ticularly for labor, through lower costs of goods in general. 
 
 We believe that, by means of the first point listed, we will be 
 able to achieve a much improved living standard for the farmers 
 and peasants. In our opinion, the agrarian reform is neither a chari- 
 table operation nor a work of philanthropy designed exclusively 
 to correct social injustice, but a patriotic, nationalistic, and de- 
 cidedly progressive program aimed at integrating Venezuela's econ- 
 omy into a sound and cohesive structure instead of the distorted 
 and unbalanced picture it has presented in the past. To elevate the 
 structure of our rural economy, placing it on a par with our indus- 
 trial and urban society, means to integrate it into a just and 
 satisfactory society. 
 
Gaston Vivas Berthier: agrarian reform and 
 
 ALLIANCE FOR PROGRESS 
 
 V ENEZUELAN ECONOMY is characterized by an extraordinary 
 disequilibrium among its productive branches. If we analyze a few 
 data, we see how this is a reality. Agriculture in Venezuela con- 
 tributes only 6 per cent to the Gross National Product. At the 
 same time, it occupies just about 32 per cent of its economically 
 active population. On the other hand, the oil industry in Vene- 
 zuela contributes about 29 per cent to the Gross National Product, 
 while it occupies only 2 per cent of the working population force. 
 We have taken the two most striking examples. This situation 
 generates a tremendous disparity in the incomes of the Venezuelan 
 working people. Our problem is not a matter of lowering the 
 income of those who work in activities different from agriculture, 
 to level the situation. It is fundamentally a matter of finding the 
 ways and manners of raising the agricultural income and thus the 
 income of the people who have farming as their way of life. 
 
 /. Agrarian Reform 
 
 At our present stage of development, nobody will dispute the 
 need of an agrarian reform. It will enable us to reach a higher 
 standard of living for our peasants— who make up the bulk of our 
 population— to make possible for them education, decent housing, 
 good food, freedom from hunger, freedom from unemployment, 
 and freedom from other worries. It will also build a bigger market 
 for our industrial development, incorporating thousands of new 
 
 236 
 
AGRARIAN REFORM 237 
 
 consumers into the economy as fast as their income is raised. How- 
 ever, agrarian reform is commonly seen in two ways, both of 
 them wrong and unfortunate. One way, the political: agrarian re- 
 form is a very appealing political banner. Seeing it in the political 
 way, demagoguery can be easily made and one can easily gather 
 political adherents and votes. The other wrong way: many people 
 see agrarian reform as sinful due to its simplicity. It is just giving 
 land away to the campesinos, the peasants. But agrarian reform 
 is perhaps the most important program of any government of any 
 Latin American country. It is not a simple program. It deals with 
 economic, financial, and social problems. But it is based on farming 
 and productivity. And farming in Latin America is in general, 
 unfortunately, antiquated and primitive. We have no tradition of 
 modern technology in farming. Our scientific investigation in agri- 
 culture is of recent origin and inadequate. It is difficult as yet to 
 develop programs of modern farming in tropical countries. 
 
 However, farming and farm productivity need enormous capital 
 investment as well as technical "know-how," which we lack, to make 
 it a sound economic activity. But as we cannot wait until we have 
 everything in order, we have to push programs which are not satis- 
 factory, at least completely satisfactory by technical standards. The 
 urge to solve the problems should not force us, however, to pile 
 errors upon errors, especially errors that in the long run will be 
 costly and create new problems. 
 
 Agrarian reform is not only giving land to the peasants. That 
 is not a goal. It is simply a means, an instrument. We need to 
 increase the income of our campesinos, to make them able to edu- 
 cate their sons, to build their homes, to have good food and 
 enough food, to have decent clothing. Land is to be worked in a 
 way that it produces good yields and incomes. It is impossible for 
 any government, no matter how rich it may be, to bear the re- 
 sponsibility of educating, housing, feeding, clothing, giving medical 
 assistance, and solving all the problems of every inhabitant of its 
 country. We need to give the people ways and means of producing 
 decent income so they can solve, or help to solve, their personal 
 problems. 
 
 This is the way I see agrarian reform. It is a system by which 
 the income of the inhabitants of the rural areas may be increased, 
 a system by which they have the possibility to obtain land, financ- 
 ing, technical assistance, and advice to obtain good yields and 
 prices for what they produce and sell. 
 
238 The Caribbean : Venezuelan Development 
 
 A problem that has been arising due to an incorrect application 
 of the agrarian reform is the fate of the true farmers, of those who 
 not only possess land but who work it with modern techniques, who 
 produce economically and create employment. This type of farmer 
 should be respected and defended as a producer of national wealth. 
 However, in the process of agrarian reform, this type of farmer, un- 
 fortunately, is being mixed up with and confused with the lati- 
 fundista, the big landowner who does not use his land or who uses 
 only a small part of it. 
 
 This confusion makes a big negative impact on good farming, 
 causes dismay and distrust, and paralyzes new development or new 
 expansion projects. This is a delicate situation which calls for care- 
 ful attention. Any economical enterprise needs a minimum of in- 
 surance to be established, to develop, and to grow. It is most im- 
 portant in the process of agrarian reform to make definite, sharp 
 distinctions between those who have farms in production and the 
 latifundista, big landowners who do not work their land, do not 
 sell it, nor permit the use of it. A system which is wrong, very 
 wrong, is to take for agrarian reform purposes farms in production 
 to be parceled and distributed among the peasants, breaking in 
 this manner the economic unit and disrupting its functionality. 
 In Venezuela— and it is the same in most Latin American countries— 
 we have no problems of lack of land, but it has not been developed. 
 We are not in the same position as, for example, the Central Euro- 
 pean countries where land has been used intensively and where 
 there is no "new" land to use. It is too easy to profit from the 
 hard work others have done to build a farm, especially if it is a 
 profitable farm in tropical countries. The agrarian reform, as some 
 have planned and carried it out in some of our countries with in- 
 credible simplicity, gives land to the peasants and lets them see 
 what they can do with it. This will not work. 
 
 It is necessary that there be some sort of organization of the 
 small parcels of land given to the peasants in cooperatives or in 
 some other type of organization which will allow the small par- 
 celero (5-10 hectares) to be able to use all the wonderful modern 
 techniques of mechanization, pest and weed control, marketing, 
 storage, and others. I have lived for the last seventeen years on my 
 farm. I am not an absentee-farmer (one who lives in the cities but 
 has a farm which he does not manage himself). I feel for my 
 country and I worry about her. I have arrived at the conclusion, 
 very crude and possibly wrong, that the old peasants must not be 
 
AGRARIAN REFORM 239 
 
 our principal worry. We have in our rural zones thousands of 
 youngsters of 14 to 18 years of age that are leaving the countryside, 
 drawn to the cities with the hope of finding work which, unfor- 
 tunately, does not always happen. This phenomenon is causing 
 tremendous problems in all our Latin American big cities, around 
 which there has been growing a "belt of misery," of people who 
 come from rural zones looking for work and opportunities, people 
 who not only are not skilled workers but are simply ignorant and 
 unprepared. I think that we have to focus our primary interest on 
 that big legion of young people in the rural zones. We should build 
 —in a hurry— hundreds or thousands of agricultural vocational 
 schools and arts and crafts schools. 
 
 We have peasants in the rural zones but we do not have farmers 
 in the real sense, that is, people who know at least some elementary 
 modern techniques of farming economically. All of our efforts, 
 worries, programs, and works should be directed especially to 
 making true farmers out of the young people of our rural zones. 
 In this program the United States can help very much. 
 
 Agrarian reform is not a matter of forcing farming at any cost, 
 with whatever yield and whatever money is left, if any, from the 
 farming process. Agrarian reform should give to the peasants the 
 land, financing, knowledge, and techniques so they can produce 
 economically, with good yields and at low cost, so that their in- 
 come may be increased and they will be able to live a decent life. 
 
 //. Alianza para el Progreso 
 
 I could not let this opportunity go by without saying at least a 
 few words about the so-called Alianza para el Progreso program. In 
 the past, while the United States was paying special attention and 
 oflEering extraordinary financial facilities to countries all over the 
 world, we, their Latin American neighbors, were almost neglected. 
 This worried us and disappointed us. Our problems, our anxieties, 
 our hopes and desires for progress, our needs and ideals have been 
 almost unknown by most Americans. Geographically, we are your 
 neighbors and it has been thought that because of this and other 
 reasons we should be with you from every point of view. 
 
 Not long ago Alianza para el Progreso celebrated its first birth- 
 day. What has happened during this first year? This anniversary 
 went by almost unnoticed not only in the United States but also in 
 Latin America; I would say even less noticed in Latin America. 
 
240 The Caribbean : Venezuelan Development 
 
 In the United States— at least— there were some declarations from 
 Mr. Moscoso, and some discussions in the press by members of the 
 Congress. In Latin America, I can say we hardly mentioned it. 
 
 I am not going to insist on a criticism that has been already 
 made of Alianza para el Progreso, about the need for accelerating 
 the program, eliminating red tape and bureaucratic difficulties 
 which retard the effectiveness of it. That is something that Mr. 
 Moscoso himself has pointed out. 
 
 Alianza para el Progreso is something that has worried me much. 
 Recently I made a rapid survey, first among friends and people 
 with whom I work (lawyers, physicians, merchants, and others) 
 in Maracay and later on in Caracas with a specialized group of 
 people interested in economic activities who should be better in- 
 formed. To both groups I put the same questions. What is 
 Alianza para el Progreso? What program is it carrying on in Vene- 
 zuela? What benefits can our country expect to derive from it? 
 How much money has been received through this program? All 
 answers could not have been more vague. To be sure, they knew 
 something about the motives of the program and that some pro- 
 jects—housing, schooling, water supply, and others— were being 
 financed. But that was all. Did they expect much from Alianza 
 para el Progreso} Maybe so, perhaps, could be; they did not exactly 
 know. 
 
 I honestly think that this program might do much good. But 
 it can also cause a lot of harm. At the present moment United 
 States government officials and Latin American government repre- 
 sentatives have big smiles on their faces. First, at the moment of 
 handing out checks for millions of United States dollars; and 
 second, when they are receiving those checks. But as I see it, this 
 money is not a gift. It is a loan. It has to be paid back. And if it is 
 not well and correctly employed, their faces will not be smiling 
 when the time comes to pay it back. 
 
 As to the present, Alianza para el Progreso has been conducted as 
 a government to government program. Things have been cooked 
 at very high levels. Our common people do not know what is 
 going on. I should say not only the common people, but most 
 people, are not aware of what is being done or planned. But it 
 does happen that everybody in these countries of Latin America 
 will have to contribute to pay back the money that today is being 
 borrowed and invested. We have the right to know more about it. 
 This is why I have said many times that I would like to see 
 
AGRARIAN REFORM 241 
 
 the Alianza para el Progreso program be transformed from a gov- 
 ernment to government program into a people to people program. 
 That is to say, there must not be so much stress on official programs 
 only. There must be much more information on what is being 
 done and planned. 
 
 Through Alianza para el Progreso the United States is forcing 
 Latin Americans to do just the opposite of what you have done in 
 your country. Progress and economic development have been ac- 
 complished in this great country through private and free enter- 
 prise and private and free energy and work. Alianza para el Pro- 
 greso, until now, is trying to develop official programs through 
 government planning and government projects. This way of doing 
 things puts almost every initiative, every movement, every thought, 
 into official hands. Mixed committees with private and government 
 representatives should be organized in Latin American countries 
 so as to give opportunities for better knowledge and understanding 
 of Alianza para el Progreso programs, as well as to utilize private 
 initiative to the maximum. 
 
 Up to now we have seen great stress placed on social programs, 
 such as housing, water supply, and schools, but very little is being 
 done to develop our economies so as to allow us in the future not 
 only to be able to pay back what is being borrowed today but 
 also to have a sound economic structure for the future. 
 
 We Latin Americans do not like to have your people think they 
 are being squeezed to give away their money as donations or gifts. 
 It is necessary that they know and be sure that their money is being 
 used through Alianza para el Progreso on a lending basis. On the 
 other hand, it is necessary to inform them what is the true situation 
 in Latin America and why it is a must that these countries be 
 helped to develop if democracy and freedom are to prevail not 
 only in Latin America but in the United States as well. Another 
 important point which I want to bring to your attention is that 
 through Alianza para el Progreso the idea is being pushed that it 
 is necessary to reform the tax system through all Latin America. 
 Problems and situations vary from country to country. Higher 
 taxes in Latin America mean reduced public and individual saving 
 capacity. And saving is a fundamental factor for developing a 
 country. 
 
 Looking back in time, if North American citizens had been com- 
 pelled to pay taxes similar to those they are paying today, we cer- 
 tainly do not think that the United States economy could have 
 
242 The Caribbean : Venezuelan Development 
 
 progressed as it has. If you compare the tax level between North 
 America and Latin America today you would certainly find differ- 
 ences. But the economic stages of development and the present 
 status of both economies must likewise be considered. Some of our 
 countries are at the present time in an economic stage which could 
 well be compared with the economy of the United States in the 
 late eighties or the first part of this century. Could the United 
 States economy have developed in 1880 at the 1962 tax level? 
 
 With special reference to Alianza para el Progreso and regarding 
 United States-Latin American relations, I must say something else. 
 Year after year, products which we import from the United States, 
 which we need and we like, increase in price due to higher salaries 
 you pay to your workers, higher taxes, and increased standards of 
 living of your population. But when coffee, for instance, goes up in 
 price one cent per pound in the American market, there is a big 
 fuss about it and you talk about speculation and other things. How- 
 ever, we absorb higher prices for your products. All this has to be 
 corrected and better understood. Latin American nations are de- 
 veloping. We have tremendous pressures for bettering the standard 
 of living of our people. We also need to pay better salaries and have 
 better incomes. 
 
 Conditions for commercial interchange are unfavorable for Latin 
 American countries. Our balance of trade is every day more and 
 more unfavorable. Our balance of payments is more and more de- 
 ficient. It is difficult for us to correct this situation when more 
 developed and industrialized countries insist on perpetuating out- 
 of-date structures in their economic relations with underdeveloped 
 countries. According to some recent information, during the last 
 ten years the prices of industrial products have increased 24 per cent 
 in the international market, while, at the same time, the prices for 
 raw materials have dropped 5 per cent. This means that today 
 underdeveloped countries receive one-third less of industrial goods 
 than ten years ago for the same amount of raw material; and at 
 the same time their cost of production is growing higher. 
 
 The general manager of the Colombian Coffee Growers Fed- 
 eration, Dr. Agusto Gomez Jaramillo, shows us a good example of 
 this. At a meeting of the Colombian American Chamber of Com- 
 merce in March, 1961, he said: 
 
 At the time that an explosive growth of population in Latin 
 America and Africa is happening, the incomes of these areas are 
 registering a considerable loss. Brazil, which exported $1,562 million 
 
AGRARIAN REFORM 243 
 
 in 1954, dropped to $1,282 million in 1959. That means 18 per cent 
 less in five years. At the same time Colombian exports diminished 
 28 per cent. In relation to the exportations of coffee between 1954 
 and 1959, Brazil was reduced by 23 per cent, Colombia by 24 per 
 cent, and Mexico by 40 per cent. In the same period Colombian 
 coffee fell in round numbers from 80 cents per pound on the New 
 York market to 45 cents per pound. 
 
 Brazil dropped from 78 to 36^/^ cents, and African coffee lost 
 even more. This reduction in price for coffee might be considered 
 a natural phenomenon due to the superproduction of coffee that 
 is well known to everyone and would not cause any special com- 
 ments if it were not for the fact that this product contributes 85 
 per cent of the total Colombian income, 70 per cent of the income 
 of Salvador, 64 per cent of that of Haiti, and 63 per cent of the 
 Brazilian exchange. Lower prices mean reduced importation; lower 
 prices mean lower income for coffee producers; lower prices mean, 
 in summary, reduction in national income which affects everyone 
 equally. It is disconcerting that a country such as Colombia can 
 buy in the United States with a given amount of coffee, only two- 
 thirds of what it could have bought in 1953. These figures are 
 equally valid in relation to West Germany and the United King- 
 dom. 
 
 In like manner, Venezuela is receiving less income for a greater 
 quantity of petroleum pumped and exported. Venezuela is in an 
 unfavorable position in being required to give a larger quantity 
 of petroleum in international exchange in order to buy the same 
 amount of merchandise as it did before 1954. The same applies to 
 Bolivia with its tin and to others. 
 
 In accordance with these data, it is clear that Alianza para el 
 Progreso will remedy very little. On the one hand it offers United 
 States dollars as a loan (even under the most liberal conditions 
 you can imagine) and on the other hand our raw materials con- 
 tinue to be reduced in price with the result that we need to export 
 larger quantities of these in order to get the same amount of 
 exchange currency as previously. 
 
 In summary we can say: 
 
 The standard of living of the major part of our population is 
 extremely low in comparison with North American standards, and 
 this situation is irritated by a population explosion in Venezuela 
 of 4 per cent per year in comparison with 1 per cent per year as 
 a world average. 
 
 To improve a standard of living, large investments are necessary. 
 
244 The Caribbean : Venezuelan Development 
 
 For these investments, we depend upon our work and our produc- 
 tion to cover the necessities of the most urgent demands of our 
 population. 
 
 At the same time our products are receiving a reduced price on 
 the international market, our imports coming from developed and 
 industrialized countries are continually costing more. 
 
 Alianza para el Progreso has been designed as a means to help 
 the developing Latin American countries through a system of 
 financing {as a loan) and technical assistance. 
 
 We might well ask: How in the world are we going to repay 
 these loans if our national income is shrinking due to lower prices 
 for our products? In my opinion, the solution is not (as some have 
 suggested) merely a question of increasing taxes. Higher taxes 
 reduce the saving capacity of an individual and saving is funda- 
 mental to the development of a country. Consequently, we believe 
 that Alianza para el Progreso alone will not give the beneficial 
 results expected of it unless it is coordinated with other measures 
 designed to remedy the situations explained above. 
 
Part VI 
 
 BIBLIOGRAPHICAL SOURCES 
 
Nettie Lee Benson : Venezuela : a case history 
 
 OF DEVELOPMENT-BIBLIOGRAPHY AND 
 REFERENCE SOURCES 
 
 J. HE DEVELOPMENT of bibliographical and reference sources 
 has moved constantly forward in Venezuela during the present 
 century, especially during the past twenty-odd years. In the latter 
 part of the nineteenth century and the early 1900's Aristides Rojas, 
 Juan Pifiango Ordonez, Adolfo Ernst, Adolfo Frydensberg, Elroy 
 G. Gonzalez, Rudolf Dolge, Tulio Febres Cordero, Manuel Lan- 
 daeta Rosales, Victor Manuel Ovalles, Luis Correa, Alfredo Jahn, 
 Saer d'Heguert, Santiago Key-Ayala, and others were all contribu- 
 ting to this development, but the larger part of their work looked 
 backward toward events and products of the nineteenth century 
 rather than at those of their own day. 
 
 The development of bibliographical sources for contemporary 
 Venezuela received its greatest initial impetus from Manuel Se- 
 gundo Sanchez and Jose E. Machado, each of whom served at times 
 as director of the national library. Manuel S. Sanchez may be said 
 to have begun the movement with his Bibliografia venezolanista, 
 in 1914, in which he listed books of other lands relating to Vene- 
 zuela. Recognizing, however, the great need of a current national 
 bibliography, he, as director of the library, initiated one by pub- 
 lishing, in 1917, the first Anuario bibliogrdfico de Venezuela. 
 Covering the year 1916, it included books and periodicals published 
 in Venezuela during that year as well as citations of works pub- 
 lished elsewhere relating to the country. Material for the year 
 1917 was also collected and prepared, but not until 1936 was it 
 
 247 
 
248 The Caribbean : Venezuelan Development 
 
 published, when it appeared in numbers 41-42 of the Boletin de la 
 Bihlioteca Nacional de Venezuela. 
 
 He next issued his Bibliografia venezolana: nomina de los princi- 
 pales libros y folletos venezolanos, publicados en los primeros meses 
 de 1918. He had a broad vision of the many bibliographical needs 
 of his country as is shown by his bibliography of the publications 
 of the Ministry of the Treasury for the years 1830-1924, which ap- 
 peared in both the Spanish and English editions of the ministry's 
 Bosquejo historico de la vida fiscal de Venezuela of 1924. Two 
 other valuable contributions were the "Bibliografia de indices 
 bibliograficos relativos a Venezuela," which appeared in the fifth 
 issue of the Handbook of Latin American Studies for 1939 and 
 Bibliografia de las ediciones nacionales y de las extranjeras relativas 
 a Venezuela incompletas o truncas, a reprint of the same published 
 in the Boletin de la Biblioteca Nacional, enero/abril, 1925. It lists 
 53 works in chronological order dating from 1723 to 1917. Much 
 of his work still remained unpublished at the time of his death in 
 1945. One of these was the Bibliografia de obras diddcticas publi- 
 cadas en Venezuela o por autores venezolanos en al extranjero, 
 which was published posthumously in 1946 with an introduction on 
 his life and works prepared by Pedro Grases. Other works prepared 
 by him are omitted because they relate to the pre-1900 period. 
 
 Jose E. Machado, as director from 1922 to 1933 of the national 
 library, began in November, 1923, the publication of a Boletin. 
 Most of the articles appearing therein between that date and 1933 
 were by Machado, although a few were by Sanchez. A catalogue 
 of the national library began as an appendix with no. 2 and ran 
 through no. 40 of 1933, at which time the Boletin was suspended, 
 not to appear again until Jan./March, 1936, as 2a epoca, no. 41. 
 Other material appearing in the Boletin from the pen of Don Jose 
 were the "Lista de seudonimos y anonimos en la literatura y en la 
 politica venezolanas" (No. 19 of 1928) and the "Escarceos biblio- 
 graficos" beginning with no. 5 and running through most issues. 
 He was the author also of Cobre vie jo, which contains, besides 
 "Anotaciones bibliograficos," essays with useful bibliographical 
 notes. 
 
 Also during the period 1918-30 the library issued the following 
 titles that are worthy of consultation: Suplemento al segundo catd- 
 logo de la Biblioteca Circulante (1918); Cuarto catdlogo de la 
 Biblioteca Circulante (1930); Catdlogo de la seccion de bibliografia 
 nacional (1921), which contains some 2,400 titles and in 1930 an 
 
BIBLIOGRAPHICAL SOURCES 249 
 
 enlarged and corrected edition of that catalogue as revised by Giro 
 Nava. Its first 56 pages contain works produced within the country 
 and the last 10 those appearing outside it. 
 
 The publication in 1944 of the Anuario bibliogrdfico venezolano 
 covering the year 1942 must have pleased Don Manuel Segundo 
 Sanchez in spite of the fact that no mention of his pioneering effort 
 was made in it and the 1942 annual was called the first one. Recog- 
 nition was paid him in the 1943 annual with a portrait of him, 
 but the accompanying note reveals that he was dead before its ap- 
 pearance. The continuing development since then is, however, a 
 fitting tribute to his early efforts and those of Machado. 
 
 The national library continued to develop as the most important 
 source of bibliographical information on contemporary Venezuela. 
 This activity became especially pronounced with its annual publi- 
 cation of the Anuario, which offers the most comprehensive cover- 
 age available for the twelve-year period 1942-54. Appearing an- 
 nually for the years 1942, 1943, 1944, 1945, and 1946, with a single 
 volume for the years 1947-48 and the two volumes for the years 
 1949-54, it is a basic key to the door to knowledge of Venezuela 
 for that period. In it one will find not only the books printed 
 in Venezuela but also those relating to it printed elsewhere. For 
 the years 1942 through 1948 periodical articles appearing in and 
 out of the country on Venezuela are also cited, and a special section 
 is devoted to the current periodical publications of the country. 
 In each issue, also, is a section devoted to authors deceased within 
 the period covered and bibliographical notes about their works 
 and an appendix of titles missed earlier. All have useful indexes, 
 including one of the printers of the books reported. A special 
 feature of the two-volume Anuario for the years 1949-54 is the 
 section devoted to authors, books, periodical articles, etc., produced 
 within and without the country, which were censured by the Perez 
 Jimenez government. 
 
 A large portion of the credit for the initial production and con- 
 tinued development of the Anuarios goes to Enrique Planchart, the 
 director from 1937 to 1953 of the national library, who continued 
 to expand the services of that institution, and to Pedro Grases, 
 the compiler of the annual for 1942-45. Indeed if any one person 
 should be singled out as the predominant contributor to recent 
 bibliographical development in Venezuela it is the latter. He 
 either directed or inspired much of the current activity in the field. 
 The larger part of his own production, as it deals with pre-1900 
 
250 The Caribbean : Venezuelan Development 
 
 development, will not be included here, but many of those items 
 listed have been prepared under his direction or with his support 
 and encouragement. 
 
 In more recent years, under the direction of Felipe Massiani and 
 his assistant Carlos Larrazabal Blanco, the national library has 
 continued the development of current bibliography. In 1960, it 
 published the large two-volume set of the Anunrio, 1949-54; and we 
 look forward with anticipation to those for the later years, which 
 we are sure will follow. In the meantime, we have the library's 
 other useful publications: the Indice hibliogrdfico de la Bihlioteca 
 Nacional, ano 1, no. 1, Jan. /June, 1956, to ano 4, no. 10, Jan./ 
 June, 1959, and the Boletin de la Bihlioteca Nacional, 3a epoca, no. 
 1, Jan. /June, 1959, to date. Although neither of these are so com- 
 prehensive as the Anuarios, both are good bibliographical tools. 
 
 Other useful publications appeared during the same period 
 that its Anuario was becoming the reality that Sanchez earlier had 
 envisioned. One, the Fichas bibliogrdficas, was a complement to 
 his Bibliografia de obras diddcticas. It was compiled by Sra. 
 Yolanda Aleman and Srta. Olga Mazzei and listed Venezuelan text- 
 books in use in 1946 and others recently published. The valuable 
 Catdlogo de la exposicion de libros de geografia e historia de Vene- 
 zuela, describing 1,691 books appearing within and without 
 Venezuela, appeared also in that same year. Arranged alphabeti- 
 cally by author and followed by an index of titles, it forms a good 
 finding aid for books on the history and geography of the country 
 from the earliest times to the date of its publication. Another of 
 1946 was Libros venezolanos; catdlogo de la coleccion donada por 
 el gobierno de los E.E.U.U. de Venezuela a la Biblioteca Nacional 
 de Lima. Its 1,332 titles are arranged alphabetically by author with 
 extensive subject and title indexes to facilitate the use of the in- 
 formation provided. One year earlier a similar work of 1,061 
 titles was compiled of the books donated to the national library 
 of Colombia: Libros venezolanos, catdlogo de la coleccion donada 
 por el gobierno de los E.E.U.U. de Venezuela a la Biblioteca Na- 
 cional de Bogota. It also has extensive subject and title indexes 
 and the two works supplement each other, for not all the same 
 titles appear in both. 
 
 Although the publications of the national library are the prime 
 source of bibliographical information, there are some lacunae that 
 must be filled by looking to other sources. One valuable comple- 
 ment to the library's publications is the Revista nacional de cul- 
 
BIBLIOGRAPHICAL SOURCES 251 
 
 tura, which first appeared in Caracas in November, 1938, and still 
 continues. Its bibliographical section helps to bridge the gaps 
 caused by the suspension of the Boletin between 1940 to 1942 and 
 the delay in the Anuario for the years 1955-61. The Revista lists 
 the latest books and from time to time carries special subject 
 bibliographies. It nearly always has a good book review section 
 and has at times in the past listed the current Venezuelan periodi- 
 cals. The Boletin de publicaciones recihidas de la Facultad de 
 Derecho of the Central University is especially useful at the present, 
 because of the currency of its lists of periodicals, books, and pamph- 
 lets. Of value also are the Boletin bibliogrdfico of the Banco Cen- 
 tral de Venezuela, 1948 to date, and the Boletin del Archivo Gen- 
 eral de la Nacion, ailo 1, no. 1, March, 1923, to date, the latter 
 especially for its information on provincial government publications 
 and periodicals as well as books and pamphlets. 
 
 Other works have appeared which supplement or continue the 
 work started by Sanchez and Machado. The July, 1956, issue of 
 the Revista de hacienda of that ministry on pages 205-33 contains 
 a bibliographical account of all the "Memorias del Ministerio de 
 Hacienda from 1830-1956" as well as the Cuentas appearing prior 
 to the twentieth century. The issue of Dec, 1958 (No. 36), pages 
 43-57, lists the Cuentas from 1912-54/55, and in the same issue 
 appears an extensive index of the Revista from its inception in 
 1936 through afio 21, no. 35 of 1956. This excellent index, com- 
 piled by Olga Mazzei de Giorgi, opens the door to much source ma- 
 terial on Venezuelan finances. 
 
 /. Biography 
 
 A considerable number of biographical works have appeared in 
 recent years. The Diccionario biogrdfico de Venezuela. Publicado 
 bajo la direccion tecnica de Julio Cardenas Ramirez deals pri- 
 marily with persons living around 1950 at the time it was compiled. 
 It includes, however, some articles on important deceased Vene- 
 zuelans and contains statistical and gazette information; all ar- 
 ranged in a single alphabet. In it also is a commercial and industrial 
 directory by trade and indexes by profession of the biographical 
 section. A year earlier appeared Qiiien es quien en Venezuela, 
 Panama, Ecuador, Colombia, June 30, 1952 (some title pages read: 
 Valores humanos de la Gran Colombia [Venezuela, Panama, Ecua- 
 dor, Colombia], the first 312 pages of which are devoted to Vene- 
 
252 The Caribbean: Venezuelan Development 
 
 zuelans. Many entries are accompanied by small portraits, and 
 the section has a brief list of pseudonyms as well as an index of 
 names classified by occupation, and an alphabetical index. The 
 latest general work of this kind appeared in 1957. The work of 
 Ramon Armando Rodriguez, the Diccionario hiogrdfico, geogrd- 
 fico, e historico de Venezuela, has 887 pages set in two columns. It 
 contains biographical and historical data from the earliest days of 
 the conquest to the present, as well as material on demography, 
 present political-territorial divisions, hydrography, meteorology, 
 orography, seismology, aboriginal mythology, and pre-Colombian 
 ethnography. Included among the biographies are many non- 
 Venezuelans who have contributed to the cultural, scientific, re- 
 ligious, political, economic, and military development of the coun- 
 try. 
 
 Vida y obras de autores venezolanos, by Raymond Leonard 
 Grismer and others, contains especially useful biographical sketches 
 and lists of works of each of 59 Venezuelan authors active during 
 the period 1900-1940. It also contains "La bibliografia de la litera- 
 tura venezolana entre los afios 1930 a 1940" of Pascual Venegas 
 Filardo. 
 
 A number of other works are available to supplement these 
 general biographical tools. Pedro Moreno Garzon's Venezolanos 
 ciento por ciento, Primera serie, provides interesting personal bio- 
 graphical evaluations of 19 significant persons. Santiago Key- 
 Ayala's Bajo el signo del Avila. Loanzas criticas presents 12 nine- 
 teenth- and twentieth-century figures. Jesus Antonio Cova's Boce- 
 tos de hoy para retratos de manana has biographies of 57 of his 
 nineteenth- and twentieth-century countrymen: musicians, histor- 
 ians, novelists, poets, statesmen, and others— many of whom he 
 knew personally. Others are Mario Briceno-Iragorry's Gente de 
 ayer y de hoy [Bocetos biogrdficos] and Arturo Uslar Pietri's Val- 
 ores humanos; charlas por television (1955), Segunda serie (1956), 
 Tercera serie (1958). 
 
 Mention should also be made of Lucas Manzano's Gentes de ayer 
 y de hoy; Amelia Gongora's Semblanzas venezolanas; Victor Man- 
 uel Ovalles' Llaneros autenticos . . .; R. D. Silva Uscategui's two- 
 volume Enciclopedia larense; Modesta Izkiel's Contribucion bio- 
 grdfica para la historia de la cultura larense. Esquemas biogrdficas; 
 Pedro A. de Santiago's Biografias trujillanas. Homenaje a Tru- 
 jillo, en el cuarto centenario de su fundacion. 1557-1957; Virgilio 
 Tosta's Siete barineses ilustres. Serie historica; and Guillermo S. 
 
BIBLIOGRAPHICAL SOURCES 253 
 
 Garcia A., Valores humanos del telegrafo en Venezuela en el primer 
 centenario del telegrafo electrico en Venezuela, 1856-1956. 
 
 Eduardo Carreno in his Vida anecdotica de venezolanos affords 
 us very personal glimpses of the lives of significant figures of both 
 the nineteenth and twentieth century. The amusing incidents re- 
 lated frequently afford a more complete idea of a person than 
 pages of facts would. Other biographers of different groups of 
 Venezuelans are Americo Bricefio Valero, Gobernantes de Trujillo 
 desde el ano 1557 hasta 1951; Trinita Casado Alcala, Medallones 
 venezolanos (Mujeres contempordneas) Treinta biografias . . . ; 
 Fabricio Gabaldon, Rasgos biogrdficos de trujillanos ilustres; Cris- 
 tobal Gallegos Silva, Hombres de Guayana; and Venezolanos en 
 el Congreso Nacional, 1953-1954. Notas biogrdficas de senadores y 
 diputados .... 
 
 Certainly no discussion of Venezuelan biographical sources would 
 be complete without the inclusion of the Revista nacional de cul- 
 tura, whose every issue gives excellent sketches of its contributors, 
 and of the fine series of Biografias escolares issued by the Fundacion 
 Eugenio Mendoza under the direction of Carlos Mendoza. To date 
 at least 4 series and some 40 volumes have appeared. Each volume 
 is prepared and written by some outstanding Venezuelan scholar 
 and is a real contribution to the country's biographical literature. 
 
 //. Geography and Description 
 
 It is difficult to make a selection from the many titles available 
 as reference tools on the description and geography of the country. 
 Certainly the Geografia de Venezuela. El territorio nacional y su 
 ambiente fiscio by Pablo Vila is one of the most complete to be 
 found. For detailed information on the states of the country, the 
 works of Marco-Aurelio Vila are very useful. To date he has pre- 
 pared studies on Anzoategui, Apure, Bolivar, Cojedes, Falcon, 
 Nueva Esparta, Portuguesa, Tachira, and Zulia. His Geografia de 
 Venezuela issued by the Fundacion Eugenio Mendoza in 1953 is 
 also a good reference geography of Venezuela. Other useful works 
 of this author worthy of citation are his Monografia de Ciudad 
 Bolivar, Monografia geogrdfica del valle de Caracas, and Las re- 
 giones naturales de Venezuela. For other studies on the states there 
 are R. D. Silva Uscategui's two-volume Enciclopedia larense; Fran- 
 cisco A. Martinez, Diccionario geogrdfico del estado de Merida; 
 Dimas Badel's Diccionario historico-geogrdfico de Bolivar) M. Bar- 
 
254 The Caribbean : Venezuelan Development 
 
 rios Frietes, Monografia del estado Portuguesa; George W. Hill's 
 El estado Sucre; sus recursos humanos; the Diccionario geogrdfico, 
 estadistico e historico del estado Zulia of Jose Ignacio Arocha; 
 Vision geogrdfica economica y humana del estado Yaracuy by 
 Federico Brito Figueroa and others; and Miguel Angel Mudarra's 
 El estado Miranda. 
 
 Still other reference sources for general information on the 
 country are Antonio Arraiz, Geografia general; Jesiis Antonio Cova, 
 Geografia fisica y politica y economica de Venezuela; El archi- 
 pielago de Los Rogues y La Orchila; La region de Perijd y sus 
 habitantes; the beautifully illustrated La Margarita of Alfredo 
 Boulton; and Casto Fulagencio Lopez' La Margarita, isla vene- 
 zolana de las perlas. Aspectos historico, cultural, geogrdfico y econo- 
 mico. 
 
 For a visual idea of the country, the works of Arturo Uslar Pietri, 
 Tierra venezolana, is excellent. To supplement this there are the 
 two issues of Venezuela: expresiones del Jiuevo ideal nacional; the 
 periodical Venezuela Up-to-date; and various editions of Asi es 
 Venezuela. 
 
 For the changing development in the political territorial division 
 of the country, the best reference is the statistical department's 
 Division politico-territorial de la Republica for 1906, 1929, 1942, 
 1944 (with its supplement of 1945), 1948, and 1957. As a good 
 companion to these publications for learning the geographical 
 names of these divisions the same department has published the 
 Nomenclador general de dreas y lugares habitados de Venezuela 
 segun el VII censo nacional de poblacion levantado el 7 de diciem- 
 bre de 1941 and the Nomenclador nacional de centros poblados y 
 divisiones politico-territoriales according to the eighth census of 
 1950. 
 
 Now available are reference sources on a wide variety of sub- 
 jects. For fine arts there are La ciudad y su musica of Jose An- 
 tonio Calcafio, a chronicle of the musical life of Caracas from its 
 earliest days to the present; Jose F. Acevedo Mijares, Historia del 
 arte en Venezuela; and La pintura en Venezuela with pictures and 
 biographies of the artists. For sports there are Lucho Carcano's 
 Venezuela y su hipismo and C. Salas, Los toros en Venezuela, pro- 
 fusely illustrated. Rafael Gomez Picon has given us his fine works 
 on the Orinoco River, tracing its course from the Rio Negro, upper 
 Orinoco, Central Orinoco, and the lower river. Orinoco, rio de la 
 libertad, with a lengthy bibliography and profusely illustrated. 
 
BIBLIOGRAPHICAL SOURCES 255 
 
 portrays the life of the river and the people along it. Other 
 references relating to rivers are Rio Tocuyo. Aspectos de su pasado 
 y SIC presente by Pedro N. Pereira and Rionegro; resena etno- 
 grdfica, historica y geogrdfica del territorio Amazonas, by Bartolome 
 Tavera-Acosta. Other useful reference tools are the Anuario ecles- 
 idstico venezolano; the Guia postal de los E.E.U.U. de Venezuela; 
 El correo en Venezuela by Francisco Velez Salas; his El correo en 
 el estado Lara and Diccionario postal de Venezuela. Cuaderno pri- 
 mero: Estado Anzodtegui; and the government's Legislacion postal 
 venezolana. 
 
 III. Atlases, Maps, and Guides 
 
 Atlases and maps are necessary tools in any study of a country or 
 area. Many maps will be found in the various works of geography 
 already mentioned, but there are several others to be mentioned. 
 The Atlas de las carreteras de Venezuela was issued in 1954 by the 
 Consejo Nacional de Vialidad. Early in 1946 appeared the Carto- 
 grafia historica de Venezuela 1635-1946. Seleccion de los princi-- 
 pales mapas publicados hasta la fecha, issued by the section of the 
 Pan American Institute of Geography and History located in 
 Caracas. The Direccion de Cartografia Nacional has prepared 
 various special maps of the country, among them are Mapa fisico 
 y politico de la Republica de Venezuela, 1:1,000,000; Mapa de re- 
 cursos minerales de Venezuela, 1:1,000,000; and Carta aerondutica 
 seccional, 1:500,000. The oil companies have also contributed maps 
 on the country, such as the Mapa de las vias de comunicacion de los 
 Estados Unidos de Venezuela, 1:1,000,000, of the Caribbean Pe- 
 troleum Co.; Mapa fisico; Republica de Venezuela, 1:1,000,000, of 
 the Shell Oil Co. of Venezuela; and also by this company the Mapa 
 del norte de la republica de Venezuela, 1:500 ,000, and the Carreteras 
 de Venezuela; pianos de las principales rutas del pais, agrupados 
 en for?na especial and Mapa de Caracas y sus alrededores, con 
 mapas del litoral y de algunas urbanizaciones. On the city of Ca- 
 racas, perhaps the best set of maps is the four-volume Guia piano de 
 calles, inmuebles y comercios de Caracas 1960. Juan Jones Parra 
 has contributed the Atlas de Venezuela; datos de geografia, po- 
 litica y economica. Vias de comunicacioji, the pocket atlas of 
 Venezuela in various editions both in Spanish and English. 
 
 There are numerous other guides to what Venezuela has to offer 
 to the tourist or the newcomer, whatever his need. Among these 
 
256 The Caribbean : Venezuelan Development 
 
 are Vincencio Baes Finol's Venezuela, informaciones utiles para los 
 emigrantes; Jose Dallos H., Guia social y comercial de Venezuela; 
 the Directorio de importadores y exportadores de Venezuela with 
 introduction and indexes in both Spanish and English; the three 
 volumes and supplements of the Guia industrial y comercial de 
 Venezuela; Indice industrial y comercial de Venezuela, Informacion 
 sobre 15,000 firmas en 200 ramos de actividad (1942); and the In- 
 dice industrial y comercial de Venezuela (1949). Then there are 
 guides to specific cities or states, such as Caracas, guia historico- 
 artistico e indicador general; Caracas en la mano, guia prdctico 
 de la ciudad; the Guia profesional del Distrito Federal; and the 
 Manual de trdnsito, guia comercial e industrial. For Maracaibo 
 there are the Guia turistica de la ciudad de Maracaibo; the Guia 
 de Maracaibo monumental; the Nueva nomenclatura de la ciudad 
 de Maracaibo, directorio mercantil y profesional, manual de direc- 
 ciones, indice de clasificados; for Valencia and Puerto Cabello, the 
 Directorio industrial, comercial y profesional de Valencia y Puerto 
 Cabello; and for the state of Lara, the Guia economica y social del 
 estado de Lara. These are all useful tools, but because of the ex- 
 tremely rapid growth of the cities of the country, many of these 
 guides rapidly become out-of-date and useful only as research 
 tools. For this reason the current telephone directories are fre- 
 quently the most up-to-date guides to the cities. At all times they 
 are extremely useful. 
 
 IV. Medicine— Hygiene— Health 
 
 When Sanchez compiled his "Bibliografia de indices bibliogra- 
 ficos relativos a Venezuela" in the early 1930's, he listed only two 
 works on medical bibliography with both relating to pre-1900. 
 Since then there have appeared far too many to list all here. Ricardo 
 Archila, who has done the most in making the Venezuelan medical 
 literature accessible, has himself contributed seven imprints of this 
 kind. In the preface to the first volume of his Bibliografia medica 
 venezolana, in 1946, he stated that the need for a guide had been 
 pointed out by Dr. Adolfo Frydensberg in 1895 in his "Materiales 
 para la bibliografia nacional," which cited a few titles. Later Dr. 
 Victor Manuel Ovalles urged that the profession cooperate in the 
 compilation of a bibliography. Some scattered brief publications on 
 various specialties did appear from time to time which are cited 
 on pages 13-16 under 'Tuentes bibliograficas" of Archila's first 
 
BIBLIOGRAPHICAL SOURCES 
 
 257 
 
 edition of a general Venezuelan medical bibliography. He also 
 lists the various periodicals containing medical data. The book 
 is arranged alphabetically by author with his contributions given 
 in chronological order. There is no subject or title index. 
 
 This first edition of 705 pages was a useful contribution, but 
 there was room for improvement; the second edition was improved 
 when it appeared in 1955. It is arranged alphabetically by author 
 and subject and also has an author and subject index at the end. 
 Another edition appeared in 1960. Although it is called the third 
 edition, actually it is an addenda to the earlier 1955 edition and 
 lists the medical works appearing between 1952 and 1958. In it 
 are 1,561 authors and 5,367 works. New features of this edition are 
 brief biographical sketches of deceased doctors, a list of scientific 
 films produced in the country, and brief reviews of the new books 
 listed. Author-subject indexes complete this most valuable aid. In 
 1951 appeared Ricardo Archila's Bibliografia otorrinolaringologico 
 venezolana hasta 1950. Another recent valuable guide to medical 
 development is Oscar Beaujon's Bibliografia del Hospital Vargas. 
 Appearing in 1961, it contains brief biographical sketches of phy- 
 sicians past and present and information on nurses and others 
 connected with that institution. Still another 1961 medical imprint 
 is Fermin Velez Boza's Bibliografia venezolana de histologia, em- 
 briologia y genetica. Ignacio Perez Galdos' Resumenes de trabajos 
 medicos venezolanos (1943) is another bibliographical aid, and still 
 others will be found listed in the second and third editions of 
 Archila's bibliography. 
 
 At the same time that medical bibliographies have been develop- 
 ing, reference tools in this field have been keeping pace. Archila, 
 active in this work also, has given us the fine two-volume Historia 
 de la sanidad en Venezuela, which among other valuable informa- 
 tion contains names and photographs of all those who have held 
 the position of director of health during the twentieth century and 
 a useful chapter on societies, congresses, and meetings on the sub- 
 ject, as well as a chapter on periodical publications devoted to 
 health. Also from his pen have come a fine biography of Luis 
 Razetti and a brief report on the Origenes de la estadistica vital en 
 Venezuela. Others also were contributing their part. Pedro A. 
 Gutierrez Alfaro produced La obstetricia en Venezuela; ensayo 
 historico, an exceedingly interesting book with chapters on medical 
 folklore and terminology; and Ambrosio Perera, his Historia de la 
 medicina en Venezuela. 
 
258 The Caribbean : Venezuelan Development 
 
 Other works closely related to medicine were being made avail- 
 able also. Fermin Velez Boza's Bibliografia venezolana sobre ali- 
 mentacion y nutricion appeared in 1950 as Cuaderno no. 3 of the 
 Publicaciones del Instituto Nacional de Nutricion. In 1942 the gov- 
 ernment issued the first edition of the Farmacopea de los Estados 
 Unidos de Venezuela and Ramon Briceno Perozo published his 
 Apuntes de legislacion farmaceutica venezolana in 1952. In 1944 
 Julio de Armas issued his El problema de la insalubridad rural en 
 el estado Guarico; breve estudio medico-social de las principales 
 endemo-epidemias tropicales with its eight pages of bibliography. 
 The following year there appeared Rafael Risquez-Iribarren's La 
 asistencia medica en el medio rural venezolano. The Department 
 of Demography and Epidemology began publication in 1938 of the 
 extremely valuable Anuario de epidemiologia y estadistica vital, 
 which is still appearing regularly, and two years earlier the Minis- 
 try of Sanitation and Social Assistance began issuing its fine Revista 
 venezolana de sanidad y asistencia, which continues to be a mine 
 of information on its subject fields. Also the library of the same 
 Ministry issued in 1943 the Catdlogo de los libros de la Biblioteca 
 del Ministerio de Sanidad y Asistencia Social, organizado por Ce- 
 cilia Ospina. The catalogue, a general one covering the subject 
 throughout the world, contains considerable material relating to 
 Venezuela. Two other imprints to be noted are German Vegas, 
 La higiene y el derecho en Venezuela and the Reglamento de sani- 
 dad nacional de los Estados Unidos de Venezuela. Before passing 
 on to another field, a good reference source on the development of 
 psychiatry in Venezuela should be cited. It is La psiquiatria en 
 Venezuela desde la epoca precolombiana hasta nuestros dias of 
 Ricardo Alvarez. It ranges all the way from magic and astrology in 
 the life of the people to the most serious studies. There is much 
 biographical information given on the leaders in this field during 
 its different periods of development, and each chapter is followed by 
 a bibliography. 
 
 V. Natural Sciences 
 
 Much information, both bibliographical and factual on develop- 
 ment in the natural sciences will be found in material cited else- 
 where in this paper, but there are other specific works to be men- 
 tioned. Jose Saer D'Heguert's "Apuntes para la bibliografia bo- 
 tanica venezolanista" appeared in the Boletin de la Sociedad Vene- 
 
BIBLIOGRAPHICAL SOURCES 259 
 
 zolana de Ciencias Naturales in 1942. Also in that review appeared 
 "Bibliografia del Dr. Henri Pittier 1878-1937" compiled by Alfredo 
 Jahn; that bibliography in its 247 titles directs one to many works 
 relative to Venezuelan flora and other scientific life. Other bibliog- 
 raphies of the natural sciences appearing in the Boletin are Eduardo 
 Rohl's "Apuntes para la historia y la bibliografia de la ornitologia 
 venezolana," the most extensive of its kind on the subject at the 
 time of its publication; his "In memoriam. Doctor Guillermo Del- 
 gado Palacios," which contains a good bibliography of the works of 
 that Venezuelan scientist; L. Kehrer's "Bibliografia geologica de 
 Venezuela"; Jose Felix Soto's "La sismologia en Venezuela"; and 
 Gaston Vivas Berthier and Edgardo Mondolfo's "Bibliografia vene- 
 zolana. Entomologia, metacologia, ictiologia y epertologia." 
 
 The "Bibliografia e indice de la geologia de Venezuela" of Hollis 
 Dow Hedberg and F. Hedberg appeared in nos. 58-59 of afio VII of 
 the Revista de Fomento (1945) and also appeared as a separate; 
 the "Bibliografia e indice de geologia, mineria y petroleo de Vene- 
 zuela, primera parte 1950-1958," of Bohdan Karol and Josefina 
 Forjonel C. appeared in the Boletin de geologia de la Direccion de 
 Geologia, volume V, no. 10; and the special publication no. 1, 
 Stratigraphical Lexicon of Venezuela, issued by that Direccion in 
 both English and Spanish, contains some fifteen pages of bibliog- 
 raphy. 
 
 Other reference works on these sciences, many of which contain 
 useful bibliographical data, are: on Venezuela flora, the two-volume 
 Catdlogo de la flora venezolana of Henri Pittier and others; Pittier's 
 Clave analitica de los generos de plantas hasta hoy conocidos en 
 Venezuela; his Manual de las plantas usuales en Venezuela and its 
 supplement; and La evolucion de las ciencias naturales y las explo- 
 raciones botdnicas en Venezuela, supplement to no. 14 of Cultura 
 Venezolana; Leandro Aristeguieta's Clave y descripcion de la familia 
 de los drholes de Venezuela; Victor M. Badillo Franceri's Clave de 
 las familias de plantas superiores de Venezuela; Hermano Elias' 
 Plantas oleaginosas cultivadas o que crecen espontdneas en Vene- 
 zuela; and Francisco Velez Salas, Importancia de las plantas medic- 
 inales para la terapeutica y la economia de Venezuela. 
 
 On the subject of climatology there are: Eduardo Rohl's Clima- 
 tologia de Venezuela; Epifanio Gonzalez P.'s Climatologia de Vene- 
 zuela; his Datos detallados de la climatologia de Venezuela; Jose A. 
 Vandellos' Estudio sohre la pluviometria en Venezuela; and Marco 
 Aurelio Vila's Los meses-punta pluviometricos en Venezuela. 
 
260 The Caribbean : Venezuelan Development 
 
 On Venezuela fauna are Eduardo Rohl's Fauna descriptiva de 
 Venezuela and the second enlarged and corrected edition: Fauna 
 descriptive de Venezuela (vertebrado); and Kathleen Deery de 
 Phelps' Aves Venezolanas. Cien de las mas conocidas; the two-vol- 
 ume Lista de las aves de Venezuela con su distribucion of William 
 H. Phelps and William H. Phelps, Jr., Tomo II, Parte I and II, of 
 which Part II appeared in Boletin no. 75 (March, 1950) and Part 
 I in no. 90 (May, 1958). It should be pointed out here that this 
 review is an indispensable reference tool for bibliographical data 
 on natural science development in Venezuela. 
 
 On Venezuelan mineral resources are Guillermo Zuloaga's Geo- 
 grafia petrolera de Venezuela; Wilbur Lundine Nelson and others' 
 Venezuela Crude Oils; the Boletin de geologia of the Direccion de 
 Geologia; the annual reports and special reports of the Ministerio 
 de Minas e Hidrocarburos; the reports of the three Venezuelan 
 geological congresses and of the national convention of petroleum; 
 Antonio Planchart Burguillos' Estudio de la legislacion vene- 
 zolana de hidrocarburos. Desenvolvimiento historico de ella; Ru- 
 fino Gonzalez Miranda's Estudios acerca del regimen legal del 
 petroleo en Venezuela; Luis Gonzalez-Berti's two-volume Com- 
 pendia de derecho minero venezolano; Victor Manuel Lopez' 
 Informe geologico y minero de los yacimientos de cobre de Aroa, 
 estado Yaracuy; and the publications of the various petroleum and 
 mining companies. One would expect to find some recent Vene- 
 zuelan works on the iron industry of that country, but I was un- 
 able to find material on this subject except that appearing in the 
 related government reports or in company reports. 
 
 VI. History 
 
 Bibliographical and reference sources on the political history of 
 contemporary Venezuela are limited indeed. Apparently most au- 
 thors either feel that they are still too close to events to have a clear 
 perspective or that treatment of them is too dangerous to them per- 
 sonally. There have been few works on the twentieth-century de- 
 velopment of the country either within or without the country, and 
 many of those few are polemical rather than historical. 
 
 I had awaited with great anticipation Venezuela independiente 
 1810-1960— the work of Mariano Picon-Salas, Augusto Mijares, 
 Ram6n Diaz Sanchez, Eduardo Arcila Farias, and Juan Liscano— 
 which was published by the Fundacion Eugenio Mendoza— with 
 
BIBLIOGRAPHICAL SOURCES 261 
 
 the expectation that it would treat in some detail political history 
 o£ the modern period. It devotes only 12 pages out of 139 to the 
 twentieth-century political history, and many of those are arguing 
 that such a history should be written. It is hardly more than a 
 brief outline of the topics that should be developed in such history. 
 Perhaps, as Sr. Mijares points out, the lack of treatment of the 
 period can be attributed to the fact that when one is a part of a 
 historical development, he either does not recognize it or he under- 
 stands it poorly. 
 
 Fortunately for those interested in Venezuelan development, Diaz 
 Sanchez in the same work devotes almost a third of his study of 
 the "Social Evolution of Venezuela (up to I960)" to the period 
 since 1900 and gives a concise but broad sketch of all elements- 
 education, oil, political parties, agriculture, immigration, popula- 
 tion, etc.— which have contributed to this evolution. Also there is 
 much information for the historian of twentieth-century Venezuela 
 in Arcila Farias' contribution to this work, entitled "Economic 
 Evolution in Venezuela." 
 
 Because of the fact that historical bibliography seems to be largely 
 lacking in most bibliographical guides, a few titles that are of value 
 to the historian interested in the period will be cited. There are 
 a number of general works, such as the 1961 edition of the Historia 
 de la historiagrafia venezolana edited by German Carrera Damas; 
 Antonio Davila's La dictadura venezolana; Vicente Davila's Proh- 
 leinas sociales; Laureano Vallenilla Lanz' Cesarismo democrdtico 
 and Disgregacion y integracion; Ramon David Leon's Hombres y 
 sucesos de Venezuela; la republica desde Antonio Pdez hasta 
 Romulo Gallegos, and his Por donde vamos (historia de un feto); 
 and Romulo Gallegos, La historia politica de Venezuela. De Ci- 
 priano Castro a Perez Jimenez. 
 
 In more recent years two men have devoted much time to the 
 writing of more modern textbooks of the country's history and the 
 works of each have useful bibliographical aids. Jose Manuel Siso 
 Martinez had his Historia de Venezuela published in Mexico in 
 1953. This is a history in the tradition of Gil Fortoul, not a per- 
 sonalistic work. Guillermo Moron had his two-volume Historia de 
 Venezuela published in Madrid in 1956-58; it is a scholarly work on 
 the country with biographical and bibliographical notes. A new 
 edition of this work appeared in 1961. 
 
 Other general works of historical interest are Mario Bricefio— 
 Iragorry's Mensaje sin destino (ensayo sohre nuestra crisis de pueb- 
 
262 The Caribbean : Venezuelan Development 
 
 lo); Pablo Ruggeri Parra's Historia politica y constitucional de 
 Venezuela; Francisco Alfonzo Ravard's La cuestion social; Juan 
 Vicente Gonzalez' Historia del poder civil en Colombia y Venezuela; 
 Santos Erminy Arismendi's Los pabellones y banderas de la patria; 
 Santiago Briceno Ayestaran's Memorias de su vida militar y politica 
 . . .; Ramon Ojeda Briceilo's El territorio Amazonas; contribucion 
 para la historia del territorio federal Amazonas; and Mario Bricefio- 
 Iragorry's Introduccion y defensa de nuestra historia. For the 
 history o£ the Cipriano Castro period, there are Mariano Picon- 
 Salas, Los dias de Cipriano Castro; Carlos Brandt, Bajo la tirania 
 de Cipriano Castro; J. Calcaiio Herrera, Bosquejo historico de la 
 revolucion libertadora, 1902-1903; and Pedro Maria Morante, Los 
 felicitadores. 
 
 For the story o£ the Gomez regime, there are Pedro Manuel Ar- 
 caya, Venezuela y su actual regimen; Jose Rafael Pocaterra, Me- 
 morias de un venezolano de la decadencia; Alejandro Rescaniere, 
 Guerra de guerrillas; Esteban Roldan Oliarte, El general Juan 
 Vicente Gomez; Pedro Maria Parra, Venezuela oprimida; cuadros 
 politicos del gobierno de Gomez; Ramon Romero, El gran bellaco; 
 Humberto Tejera, Cinco dguilas blancas; and Pedro Garcia Gil, 
 Cuarenta y cinco anos de unijorme. Memorias, 1901 a 1945. 
 
 For the events of the last thirty-odd years there is much more 
 available than for the earlier years of this century. Arturo Uslar 
 Pietri has contributed De una a otra Venezuela and recently 
 Materiales para la construccion de Vefiezuela, and Juan Uslar 
 Pietri has given us his La estructura social y politica de Venezuela. 
 Many works by, or about the political life of. President Romulo 
 Betancourt have appeared: Romulo Betancourt. Pensamiento y 
 accion; Romulo Betancourt; Semblariza de un politico popular, 
 1928-1948; Romulo Betancourt, interpretacion de su doctrina popu- 
 lar y democrdtica; his Venezuela rinde cuentas; Posicion y doctrina; 
 Trayectoria democrdtica de una revolucion; and Venezuela: politica 
 y petroleo. 
 
 Mariano Picon-Salas has contributed his 1941, cinco discursos 
 sobre pasado y presente de la nacion venezolana and Comprension 
 de Venezuela. Joaquin Gabaldon Marquez has presented Archivos 
 de una inquietud venezolana and Pdginas de evasion y devaneo 
 (1948-1958). Eleazar Lopez Contreras has contributed his Pdginas 
 para la historia militar de Venezuela and El triunfo de la verdad; 
 documentos para la historia vejiezolario. Juan Antonio Cova has 
 written of his imprisonment in Entre barrotes; diario de im perio- 
 
BIBLIOGRAPHICAL SOURCES 263 
 
 dista en la cdrcel; Diego Cordoba, of exile, in Sonadores en el 
 destierro; and Alejandro Gomez has offered his satirical Los 
 columpios. Luis Enrique Osorio wrote of Democracia en Venezuela 
 and Pedro Maria Morante of personalism and truth in Amarillo, 
 azul y rojo. 
 
 On Pan-Americanism during the period, there are Eduardo Plaza 
 A's La contribucion de Venezuela al panamericanismo durante el 
 periodo 1939-1943; and the works of Simon Planas Suarez: La 
 solidaridad americana; historia y critica de la epoca presente; 
 Venezuela soherana, panamericanista no regionalista; Pdginas de 
 preocupacion y patriotismo, 1936-1941; and Cuestiones internacion- 
 ales y politicas. 
 
 Other works which could be noted here will be listed in the ac- 
 companying bibliography; but before terminating this section on 
 history, reference should be made to some of the useful journals 
 appearing in this field. The Boletin de la Academia Nacional de la 
 Historia, which began in 1912, still appears regularly. The Boletin 
 del Archivo General de la Nacion has been full of historical aids 
 of all kinds since its beginning in 1923. A new historical review 
 being published by the Centro de Estudios Historicos of the Hu- 
 manities and Education Faculty of the Central University promises 
 to be a good one. Although to date most of the articles in the 
 Revista de Historia which began in April, 1960, are on the colonial 
 period, it can be expected to present material on the twentieth 
 century also. Politica, beginning with September, 1959, is an ex- 
 cellent journal dealing almost exclusively with contemporary Vene- 
 zuela; and much that has already appeared is very useful and will 
 remain so when the history of this century is written. Historical 
 information is to be found, of course, in great abundance in many 
 government publications, especially annual reports and journals 
 too numerous to list here. 
 
 VIL Political Parties 
 
 The best recent study on political parties of Venezuela is Manuel 
 Vicente Magallanes' Partidos politicos venezolanos, which includes 
 useful bibliography for further research on the subject. Magallanes 
 gives a brief historical account of parties both past and present. 
 Another work deals with the P.D.V. (Partido Democratico Vene- 
 zolano) from whose initials the author fashioned his title, Por 
 donde vamos. This work of Ramon David Leon actually deals with 
 
264 The Caribbean : Venezuelan Development 
 
 parties of the 1930's and the relations of these to other parties in 
 neighboring Latin American countries. 
 
 VIII. Constitution and Laws 
 
 For the early constitutional development in Venezuela the three- 
 volume work of Jose Gil Fortoul, Historia constitucional de Vene- 
 zuela is the basic tool. Its extensive bibliography on the subject 
 for the period covered is very useful. Other works on the subject 
 are also good. Some of these are Ulises Picon Rivas, tndice consti- 
 tutional de Venezuela, which contains all the constitutions from 
 1811 to that of 1936 and three pages of bibliography on the subject. 
 The Elementos de derecho constitucional y constitucion de la re- 
 publica of Pablo Cells Briceno has an extensive bibliography; Am- 
 brosio Oropeza analyzes the various constitutions of the country 
 in his Evolucion constitucional de nuestra republica; andlisis de las 
 constituciones que ha tenido el pais', and Pablo Ruggeri Parra gives 
 a juridical historical study of it in his Derecho constitucional vene- 
 zolano, whose second edition appeared in 1953. 
 
 The primary reference source for all of the constitutions and all 
 laws of Venezuela is, of course, the Gaceta oficial of the govern- 
 ment or the two large collections of laws: Recopilacion de leyes y de- 
 cretos which has appeared annually for the years 1872 to date and 
 the 18-volume Leyes y decretos reglamentarios de los Estados Unidos 
 de Venezuela. Time and space are too limited to detail here the 
 different civic, commercial, industrial, and penal codes, which have 
 appeared in numerous editions. 
 
 IX. Treaties Sources 
 
 The best reference source on treaties and other agreements of the 
 Venezuelan government with foreign countries is Tratados puh- 
 licos y acuerdos internacionales de Venezuela (eleven volumes 
 issued to date), a chronological collection covering the period 1820 
 to 1955. A table of treaties in force as of the date of the volume is 
 contained in volumes III, IV, VI, and VII. In the introduction to 
 volume VIII, it was stated that volume XI would contain a similar 
 table but the volume does not have one. Although this is the most 
 comprehensive reference source for information on Venezuelan 
 treaties, perhaps we should also mention the earlier Coleccion de 
 tratados publicos de Venezuela, which, arranged chronologically, 
 contains treaties from 1820 to 1909. 
 
BIBLIOGRAPHICAL SOURCES 265 
 
 The best source for treaties effected since 1955 is the Gaceta 
 oficial, which carries both the legislative decrees of approval and 
 the texts of the treaties. This information is also contained in the 
 annual volumes of the Recopilacion de leyes y decretos; and the 
 annual report of the Ministry of Foreign Relations to the Congress, 
 the Libro amarillo, also carries the text of treaties and treaty in- 
 formation from 1835 to 1961. 
 
 X. Literature 
 
 Venezuelan literary production has developed broadly during the 
 twentieth century so that it is not surprising that there should be 
 more bibliographical sources available for it than for any other 
 subject field. Probably the most comprehensive work and the latest 
 is Juan Liscano's "Ciento cincuenta anos de cultura venezolana" 
 on pages 421-655 of Venezuela independiente 1810-1960. Liscano 
 deals with all phases of the written works, including political, so- 
 ciological, educational, scientific, etc., as well as belles lettres as 
 the term "literary" is often interpreted. As his title implies, he 
 covers the whole broad range of cultural development so that 
 his study is an indispensable reference source on Venezuelan cul- 
 ture from 1810 to 1960. 
 
 Still he does not exhaust the subject. He simply illustrates how 
 far and how continuously Venezuela has developed in the past 
 150 years. There is no bibliography as such accompanying his 
 article, but the volume as a whole has a lengthy index which fa- 
 cilitates the use of the voluminous data found in Liscano's contri- 
 bution. 
 
 There are other bibliographical aids, some of which have already 
 been mentioned in earlier sections of this paper and will not be 
 repeated here. A useful guide to literary source materials printed 
 before 1950 is the work of Pedro Grases, 'Tuentes generales para 
 el estudio de la literatura venezolana" in Revista nacional de cul- 
 tura, afio XI, no. 81 (julio-agusto, 1950), pp. 86-99. Recently 
 Angel Mancera Galletti has contributed Qiiienes narran y cuentan 
 en Venezuela; fichero bibliogrdfico para una historia de la novela 
 y del cuento venezolanos, and Jose Ramon Medina's work appear- 
 ing in 1959, La nueva poesia venezolana, includes a preliminary 
 bio-bibliography of 38 living Venezuelan poets. Pascual Venegas 
 Filardo's "Bibliografia de la literatura venezolana entra los anos 
 1930 a 1940" (already cited) has appeared in many re-editions, one 
 
266 The Caribbean : Venezuelan Development 
 
 of which was Mariano Picon-Salas' Literatura venezolana, 3. ed., 
 which also contains a brief "Bibliografia resumida" on pages 222-25. 
 Arturo Uslar Pietri in Letras y hombres de Venezuela offers a 
 "Bibliografia basica"; Jose J. Arrom lists Venezuelan drama in his 
 "Bibliografia dramatica venezolana" in the Anuario bibliogrdfico 
 venezolano for 1946; and Irma de Sala Ricardo has pages 13-23 of 
 the Injortne de la Asociacion Cultural Interamericana 1940-1941 
 devoted to "Datos biograficos y bibliograficos sobre las poetisas 
 venezolanas." 
 
 Pedro Grases has published two other bibliographical works: 
 Temas de bibliografia y cultura venezolanas and Nuevos temas de 
 bibliografia y cultura venezolanas, neither of which I have had 
 available for consultation to learn whether they deal with con- 
 temporary Venezuela. From references available it would appear 
 that the latter title has material on both twentieth-century literary 
 and historical development. 
 
 There are a number of recent works with extensive bibliography 
 on Romulo Gallegos: Romulo Gallegos y la problemdtica vene- 
 zolana by Angel Damboriena; the 1954 Mexican edition of Dona 
 Barbara; and Orlando Araiijo's Lengua y creacion en la obra de 
 Romulo Gallegos. Another of his works that is a valuable one is 
 Una posicion en la vida. Another reference source on the subject 
 of contemporary literature is Joaquin Gabaldon .Marquez' Me- 
 moria y cuento de la generacion del 28. There are many other 
 works with much bibliographical data and some of the recent ones 
 will be listed in the bibliography accompanying this paper. 
 
 XI. The Press 
 
 There are several reference sources for the press. One of the 
 most recent is Humberto Cuenca's Imagen literaria del periodismo, 
 whose "Trajectory of the Venezuela Press" begins with the revolu- 
 tionary period and comes down to 1960. The sections covering 
 the twentieth century are especially pertinent and useful. Pedro 
 Grases' Materiales para la historia del periodismo en Venezuela 
 durante el siglo XIX, in spite of its title, has considerable data 
 on twentieth-century newspapers, especially provincial ones. It has 
 data on the printing press as well as newspapers, and the prologue 
 contains a useful bibliography to Venezuelan periodicals. Other 
 useful bibliographic sources are Jose Lopez de Sagredo y Bru's 
 
BIBLIOGRAPHICAL SOURCES 267 
 
 Indice de periodicos y periodistas del estado Zulia (1821-1948); 
 Emilio Menotti Sposito's La prensa en el estado Merida . . . ; 
 nomina de las revistas y periodicos que vieron la luz en el estado 
 Merida desde 1840 hasta 1950; Rafael S. Guerra's Apuntes para 
 la historia del periodismo de Carahobo; J. Saez d'Heguert's Prensa 
 barquisimetana; and Santos Erminy Arismendi's "La imprenta y 
 el periodismo en Cariipano" in Boletin de la Biblioteca Nacional, 
 Caracas, no. 7 (April, 1925). 
 
 Xll. Folklore 
 
 A good bibliography on Venezuelan folklore is to be found at 
 the end of Rafael Olivares Figueroa's second volume of Folklore 
 venezolano under the title "Contribucion a la bibliografia del folk- 
 lore venezolano." Isabel Aretz has published a Manual de folklore 
 venezolano and Miguel Cardona and others a Panorama del folk- 
 lore venezolano. Probably the best brief history of the develop- 
 ments in the folklore of the country is to be found in the two sec- 
 tions "Cultura popular" and "Costumbristas e investigadores del 
 folklore" of Juan Liscano on pages 435-61 of Venezuela independ- 
 iente 1810-1960. Another of his works on the subject is Folklore 
 y cultura. Jose Eustaquio Machado's Cancionero popular vene- 
 zolano was republished and made available in 1946, and Santos 
 Erminy Arismendi's valuable Refranes que se oyen y dicen en 
 Venezuela appeared in 1953 as did his Huellas folkloricas: tra- 
 diciones, leyendas, brujerias y supersticiones. 
 
 Other significant works are Luis Felipe Ramon y Rivera and 
 Isabel Aretz, Folklore tdchirense; Victor Manuel Ovalles, El llanero; 
 Miguel Acosta Saignes, Las turas; and Julio Febres Cordero, Mitos 
 y tradiciones. Practically all supply additional reference sources. 
 
 Several reviews devoted to folklore have appeared in the con- 
 temporary period and are cited here because of both their biblio- 
 graphical and reference value. They are the Revista venezolana de 
 folklore, no. 1-2, Jan.-Dec, 1947, of the Servicio de Investigaciones 
 Folkloricas Nacionales; the Boletin del Instituto de Folklore; and 
 the presently current Archivos venezolanos de folklore no. 1, Jan.- 
 Dec, 1952, of the Humanities Department of the Central Uni- 
 versity. Other reviews, which frequently carry folklore material, 
 are the Revista nacional de cultura; the publications of the Socie- 
 dad de Ciencias Naturales La Salle; and El Parol. 
 
268 The Caribbean: Venezuelan Development 
 
 XIII. Linguistics 
 
 Since the publication in 1897 of Julio Calcano's El castellano 
 en Venezuela; estudio critico with its study of venezolanismos, 
 there have been a considerable number of linguistic works pub- 
 lished in Venezuela, and each contains much bibliographical data 
 relating to the subject. In 1929 the distinguished Venezuelan lin- 
 guist, Lisandro Alvarado, published his Glosarios del bajo espanol 
 en Venezuela, which was later republished in his Obras completas: 
 volume I, Glosario de voces indigenas de Venezuela (1953); volume 
 II, Glosarios del bajo espanol en Venezuela, part 1 (1954), and 
 volume III, Glosarios del bajo espanol en Venezuela, part 2 (1955). 
 Angel Rosenblat has also contributed to this field with his Buenas 
 y malas palabras en el castellano de Venezuela with a prologue by 
 Mariano Picon-Salas; El nombre de Venezuela; and Lengua y cul- 
 tura de Venezuela. Also useful are Roberto Martinez Centeno, 
 Barbarismos y solecismos; Ines de Miiller, Venezolanismos y otras 
 palabras muy usadas, and Henri Louis Anne van Wijk, Contri- 
 bucion al estudio del habla popular de Venezuela. Pedro Grases in 
 his Estudios de castellano. Bibliografia venezolana gives a biblio- 
 graphical analysis of works on the Spanish language done by Vene- 
 zuelans. 
 
 For Indian languages, we have the two volumes of Cesareo de 
 Armellada's Gramdtica y diccionario de la lengua pemon. Arekuna, 
 Taurepdn, Kamarakoto (familia caribe); Basilio Maria de Barral's 
 Diccionario guarao-espanol y espanol-guarao; and the Diccionario 
 castellano-arekuna issued as the appendix to Alessandro Luciano 
 Bernardi and Luis Ruiz Teran's Estudio botdnico-forestal de las 
 selvas pluviales del Rio Apacard, region de Urimdn, estado Bolivar 
 (1957). 
 
 XIV. Fine Arts 
 
 In the fine arts, the best reference source for music is Jose An- 
 tonio Calcano's La ciudad y su musica. Cronica musical de Caracas. 
 His Contribucion al estudio de la musica en Venezuela is also use- 
 ful. Useful, too, are Arnold Stallbohm's La musica, sus interpretes 
 y el publico de Venezuela and C. Salas and E. Feo G., Sesqui- 
 centenario de la opera en Caracas. Relato historico de ciento cin- 
 cuenta anos de opera 1808-1958. Another useful work is Himno 
 nacional y el de cada uno de los estados de la Union Venezolana, e 
 
BIBLIOGRAPHICAL SOURCES 269 
 
 incluyendo, ademds, el joropo "Alma llanera" del maestro don 
 Pedro Elias Gutierrez. For painting, there are Mariano Picon- 
 Salas, La pintura en Venezuela; Enrique Planchart, La pintura 
 en Venezuela with prologues by Fernando Paz Castillo and Pedro 
 Grases; and Jose Nucete-Sardi, Notas sobre la pintura y escultura 
 en Venezuela, 3. ed. Juan Liscano in "Ciento cincuenta afios de 
 cultura venezolana" supplies much information on both musical 
 development and that of the plastic arts in this century. 
 
 XV. Education 
 
 There has not been a great deal written on contemporary educa- 
 tion apparently. Liscano gives no bibliographical citations worthy 
 of note about it and only a small amount of statistical data. Most 
 of what has appeared is in the various government and university 
 publications. Alexis Marquez Rodriguez has recently published 
 Presente y futuro de la educacion en Venezuela. Earlier there ap- 
 peared Luis Padrino's Panorama de la educacion en Venezuela and 
 F. Angel Losada's Problemas educacionales. Also useful is Instruc- 
 cion publica en Venezuela and the recent Compilacion legislativa 
 de educacion venezolana. Leyes, reglamentos, resoluciones y nor- 
 mas vigentes. 
 
 XVI. Economics 
 
 Knowledge of agricultural development has been made more 
 accessible by the appearance of bibliographical aids. In 1943 
 there appeared Contribucion a la bibliografia venezolana de temas 
 agropecuarios prepared by Pedro Grases and arranged by subject. 
 This was followed in 1946 by Contribucion bibliogrdfica a las in- 
 vestigaciones en ciencias agricoles y biologicas y otras relacionadas 
 con ellas, compiled by Gaston Vivas Berthier. It is a lengthy 
 general bibliography on world agriculture, with titles on Venezuela, 
 but it has its place in the bibliographical development of the period. 
 The Indice bibliogrdfico agricola de Venezuela appeared in 1957; 
 compiled by Victor M. Badillo and C. Bonfanti, it is an excellent 
 and extensive study based on most Venezuelan periodicals and 
 government sources. It lists archives, libraries, and periodicals 
 consulted, is arranged by subject, has both author and subject in- 
 dexes, and was published by the Fundacion Eugenio Mendoza. 
 
 A good recent guide to farm produce marketing and economic 
 
270 The Caribbean : Venezuelan Development 
 
 aspects of Venezuelan agriculture is the Bibliografia sobre mer- 
 cadeo de productos agropecuarios venezolanos, prepared by the 
 Division of Agricultural Economy of the Direccion de Planifica- 
 cion Agropecuaria. Another bibliographic tool in the economic 
 field is Carlos Miguel Lollet Calderon's Introduccion a la biblio- 
 grafia venezolana y repertorio de la bibliografia venezolana eco- 
 nomica y social. 
 
 Probably the two best reference sources on the economic de- 
 velopmental problem are The Economic Development of Venezuela 
 of the mission sent to that country at the request of its government 
 to make a study of conditions there and to recommend a program, 
 and The Fiscal System of Venezuela, a report made by the Com- 
 mission to Study the Fiscal System of Venezuela. Both these studies 
 were made by foreigners at the request of the Venezuelan govern- 
 ment and with its assistance, and for that reason are included here 
 as a development emanating from that country. Neither has a 
 bibliography of sources, but both have good indexes and are ex- 
 cellent on the subject they treat. The latter has also been published 
 in Spanish in two volumes: Informe sobre el sistema fiscal de Vene- 
 zuela. Another useful book on these subjects is Venezuela. Business 
 and Finances by Rudolfo Luzardo. The author in the preface ex- 
 plains that he has put it into English first because its purpose is to 
 inform foreign investors on economic conditions of the country. 
 Already mentioned earlier is the Bosquejo historico de la vida fiscal 
 de Venezuela covering Venezuela fiscal life up to 1924. Other 
 works that should be mentioned here are Ramon Veloz' Economia 
 y finanzas de Venezuela desde 1830 hasta 1944 and Tomas Enrique 
 Carrillo Batalla's "El desarrollo del sector manufacturero indus- 
 trial de la economia industrial" in Boletin bibliogrdfico mensual, 
 aiio III, no. 17 enero/junio, 1962. 
 
 Arturo Uslar Pietri's Sumario de economia venezolana para 
 alivio de estudiantes, issued for the use of students at the Central 
 University, is a mine of information on all phases of economic 
 development up to 1944 and the same is true of the second edition 
 corrected and brought up to date with the collaboration of Herman 
 Avendano Mongon, D. F. Maza Zavala, and Bernardo Ferran, and 
 issued by the Fundacion Eugenio Mendoza in 1958. Both editions 
 are illustrated with maps, charts, tables, diagrams, etc. A similar 
 work is the Lecciones de economia venezolana of Professor Roberto 
 Moll given in the Central University in 1941-42, which first ap- 
 peared in numbers 48-55 of the Revista de Fomento and was after- 
 
BIBLIOGRAPHICAL SOURCES 271 
 
 wards brought together and issued as a book. It has a useful index 
 and is a good reference work for the period it covers. 
 
 Eduardo Arcila Farias in his "Evolucion de la economia en 
 Venezuela" on pages 343-420 of Venezuela independiente 1810-1960 
 gives a brief survey of economic development during this century 
 and a short bibliography of sources. 
 
 Useful reference sources on the economic geography of the coun- 
 try are Manuel Montaner S., Geografia economia de Venezuela; 
 Antonio Arraiz and E. L. Egui, Geografia economica de Venezuela; 
 and Adrian Coll Reyna, Geografia economica de Venezuela. On the 
 agrarian reform is the informative Coleccion de estudios agrarios, 
 a collection of brief monographs written largely by Victor Manuel 
 Gimenez Landinez with each one devoted to a special phase of the 
 problems involved. Also on the subject is the publication of the 
 Presidency, Hacia la independencia economica de Venezuela . . . , 
 which has the text of the agrarian law as well as the speeches of 
 the President and others. There are numerous works on the sub- 
 ject, including Arturo Uslar Pietri, Materiales para la construccion 
 de Venezuela, and Ramon David Leon, De agropecuario a pe- 
 trolero. 
 
 To attempt to go more fully into the available literature on the 
 economic development of Venezuela would make this paper entirely 
 too lengthy. Many works prepared both by individuals and by gov- 
 ernment bodies would have to be included. Many will have to be 
 omitted. Some should be mentioned, however, like the publications 
 of the Consejo de Bienestar Rural and the Corporacion Venezolana 
 de Fomento, and the many valuable ones of the Direccion General 
 de Estadistica, the Banco Central, and all the other government 
 bodies as well as the economic journals of the various universities. 
 
 It had been my hope to present with this paper a list of the 
 many long-lived Venezuelan periodicals, for they witness very clear- 
 ly to the continuing development of Venezuela; but neither time 
 nor space will permit their inclusion here. It is to be hoped that 
 the material presented does show that in respect to the bibliographi- 
 cal and reference sources produced in contemporary Venezuela 
 there has certainly been a case of development. 
 
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272 The Caribbean: Venezuelan Development 
 
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 66 pp. 
 . Catdlogo de la seccion de bibliografia nacional (Segunda 
 
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 . Cuarto catdlogo de la Biblioteca Circulante. Caracas, 1930. 
 
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 Caracas, 1946. Catdlogo de la exposicion de libros de geografia 
 
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BIBLIOGRAPHICAL SOURCES 273 
 
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274 The Caribbean: Venezuelan Development 
 
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 presores Unidos, 1941-42. 
 
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 1958. 
 
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BIBLIOGRAPHICAL SOURCES 275 
 
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 del estado Zulia. Caracas: Avila Grafica [1949?]. 204 pp. 
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BIBLIOGRAPHICAL SOURCES 295 
 
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 Venezuela. Universidad Central. Institute de Investigaciones Eco- 
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Index 
 
 ABORIGINES, 14-21. See also Indians 
 
 Act of Bogota, 118 
 
 Adriani, Alberto, 221 
 
 Agrarian Reform, 208, 209; achieve- 
 ments, 231-32; Corn Production Pro- 
 gram, 216; distribution of land, 105, 
 124, 216, 229, 230; latifundia, 22.b; 
 National Agrarian Institute, 216, 
 229-31; objectives, 213, 214; technical 
 education, 216 
 
 Agrarian Reform Commission, 228 
 
 Agrarian Reform Law, 124, 217, 228 
 
 Agricultural and Livestock Bank, 222, 
 227, 234 
 
 Agriculture: colonial, 197; farm labor, 
 116, 117, 208, 227; land tenure, 214, 
 224, 226; land use, 232; latifundia, 
 225; nineteenth century, 198, 199; 
 production, 203-5, 207, 217, 232-33; 
 program for development, 209-11; 
 soils, 9-10 
 
 Alba, Pedro de, xi 
 
 ALCASA, 187 
 
 Alfonzo-Ravard, Colonel, 182 
 
 Alliance for Progress: funds, 119; Latin 
 American opinion, 240; objectives, 
 118-20; public housing, 111-15; role 
 of private enterprise, 171; tax re- 
 form, 241-42, 244 
 
 Aluminum, 187 
 
 American Chamber of Commerce in 
 Venezuela, 167 
 
 Andes, 4, 5 
 
 Andres Bello Catholic University, 51 
 
 Anuario bibliogrdftco venezolano, 249 
 
 Arauquinoid Series, 19 
 
 Archaeology, 14-21 
 
 Argentina, 135 
 
 Armas, Julio de, 53 
 
 Autonomous State Universities, 50-66 
 
 BALANCE of trade, 158, 201, 242 
 Banco Hipotecario de la Vivienda Pop- 
 ular, 114 
 
 Banco Obrero, 113 
 
 Barquisimeto, 18 
 
 Barrancoid Series, 18, 19 
 
 Beebe, William, 8 
 
 Bello, Andres, 68 
 
 Berrios, Antonio de, 185 
 
 Betancourt, R6mulo, 116, 117, 129, 178, 
 227 
 
 Bethlehem Steel Corporation, 180, 187 
 
 Bibliografia venezolanista, 247 
 
 Bolivar, Simon (ancestor of the Lib- 
 erator), 50 
 
 Bolivar, Simon, xx, 29, 75, 79, 179 
 
 Brazil, 135 
 
 Budget, 92, 93, 94, 97, 98, 122 
 
 CANAIMA, 15 
 
 Capital flight, 95, 142 
 
 Caracas, 25, 50 
 
 Cariaco Gulf, 6 
 
 Caribes, 7 
 
 Caroni River, 9, 181, 182, 183, 185 
 
 Castro, Cipriano, 51 
 
 Castro, Fidel, 133, 144 
 
 Cattle, 8 
 
 Caudillos, 29, 30, 31 
 
 Central American Common Market, 
 144, 145 
 
 Central University: athletics, 65; build- 
 ing construction, 58; enrollment, 56, 
 58; extension services, 65; Faculty 
 Welfare Institute, 62, 63; graduate 
 training, 64-65; pensions, 63; pro- 
 motion system, 61; retirement sys- 
 tem, 63; scholarships, 61, 64; student 
 welfare plan, 64; teaching staff, 60; 
 University City, 57, 58; University 
 Planning Office, 65, 66; wages, 62 
 
 Cerro Bolivar, 9, 180, 187 
 
 Charles III, 51 
 
 Charles IV, 51 
 
 Charles V, 25, 197 
 
 Chenchena, 7 
 
 Chigilire, 7 
 
 297 
 
298 
 
 The Caribbean : Venezuelan Development 
 
 Cientificos, 143 
 
 Ciudad Bolivar, 181 
 
 Climate, 4 
 
 Cocoa, 6, 197, 207 
 
 Coffee, 207, 243 
 
 Colombian American Chamber of 
 
 Commerce, 242 
 Colombian Coffee Growers Federation, 
 
 242 
 Columbus, Christopher, 3, 10-11, 196- 
 
 97 
 Communism, 141, 144, 172-73 
 Community development, 128-29 
 Compaiiia de Aceros del Pacifico, 189 
 Compaiiia Shell de Venezuela, 230 
 Congress of Panama, xv 
 CORDIPLAN, 123 
 Corn, 17, 216 
 Corocoro, 7 
 
 Corporacion de Fomento, 189 
 Corporacion de Guayana, 10, 181-82, 
 
 185, 190 
 Council of Scientific and Humanistic 
 
 Development, 55, 61, 64 
 Creole Petroleum Corporation, 128, 
 
 175, 176, 188 
 Crespo, Joaquin, 30 
 Crops, 5, 6, 207, 208, 217. See also 
 
 Agriculture 
 Cruxent, Jose M., 14 
 Cubagua, 16, 24 
 
 DABAJUROID Series, 17 
 De Alba, Pedro. See Alba, Pedro de 
 De Armas, Julio. See Armas, Julio de 
 De Berrios, Antonio. See Berrios, An- 
 tonio de 
 Declaration of Panama, xv 
 Delgado Chalbaud, Carlos, 52 
 De Ojeda, Alonso. See Ojeda, Alonso 
 
 de 
 De Solo, Francisco. See Solo, Francisco 
 
 de 
 Diaz, Porfirio, 143 
 
 ECHAVARRIA, Luis, 141 
 
 Economic Commission for Latin Amer- 
 ica, 83 
 
 Economy: agricultural production, 157, 
 202, 203, 205; balance of trade, 158, 
 201; capital flight, 95, 142; colonial 
 economy, 21, 24, 25, 26; distribution 
 of income, 229; fiscal policy, 95, 99, 
 100, 122; foreign exchange, 84; for- 
 
 eign investment, 84, 85, 163, 168; 
 foreign trade, 103, 104, 158, 201, 242; 
 GNP, 90, 91, 151, 160; growth and 
 development, 91, 202; housing, 85, 
 111-15; industrial development, 102, 
 105, 158; investment growth, 83; la- 
 bor supply, 85; national budget, 92- 
 97 passim; national income, 83, 90; 
 national policy, 82-88 passim; per 
 capita income, 160; petroleum pro- 
 duction, 86; private investment, 157- 
 62, 171; public sector, 79-89, 97, 98. 
 150, 151, 153; savings, 98; steel pro- 
 duction, 85; structure, 91, 149, 150, 
 160; taxation, 93-94, 96, 122 
 
 Education: administrative policy, 35- 
 49; colonial, 35, 67-68; compulsory 
 attendance, 36, 68; cost per student, 
 39; grade levels, 35n; literacy train- 
 ing, 45; national aims, 49; national 
 examinations, 71; private schools, 
 67-75; school construction, 45-46, 
 101, 102, 125; school enrollment, 36, 
 37, 39, 41, 69, 70; state supervision, 
 70-74; state support, 36, 38; student 
 withdrawals, 42; teacher training, 
 43, 44, 47; teaching materials, 46 
 
 Education Law of 1955, 38 
 
 El Dorado, 8, 25, 179, 196 
 
 El Jobo, 15 
 
 Electrificaci6n del Caroni, 182 
 
 European Common Market, 134, 141, 
 145 
 
 Exchange control, 95, 96, 97 
 
 Exchange rates, 159, 160 
 
 FACULTADES, 55, 56, 62 
 
 Faculty Welfare Institute, 62, 63 
 
 FAPREC, 71 
 
 Farming. See Agriculture 
 
 FEDECAM, 147, 148 
 
 Federation of Catholic Parent-Teachers 
 
 Associations, 71 
 Ferndndez de Leon, Francisco, 51 
 Fiscal policy, 95, 99, 100, 122 
 Food: Venezuelan imports, 203, 206; 
 
 world production, 103 
 Foreign investment: benefits of, 175; 
 
 function of, 168; opportunities, 168; 
 
 productivity of, 84; size of, 84; 
 
 venture capital, 164 
 Foreign trade, 103-4; balance of trade, 
 
 158, 201, 242; exports, 199; imports, 
 
 206; price fluctuations, 104 
 
INDEX 
 
 299 
 
 Fundaci6n Creole, 188 
 
 Fundacion de la Vivienda Popular, 113, 
 
 115, 186 
 Fundacion Mendoza, 188 
 Furtado, Celso, 135 
 
 GALLEGOS, R6mulo, 52, 227 
 
 Geography, 3-13 
 
 Gil Borges, Estaban: ability as an 
 orator, xiii, xiv; activities as Vene- 
 zuelan Foreign Minister, xv, xvi; 
 early life, xii; honors received, xvi; 
 positions held, xiii; publications, 
 xvi; quoted, xix-xxii; range of in- 
 terests, xvi 
 
 GNP, 90, 91, 151, 160, 236 
 
 Goggin, John M., 21 
 
 Gomez, Juan Vicente, xiv, 30, 36, 226 
 
 G6mez Jaramillo, Agusto, 242 
 
 Gonzalez, Armando, 116 
 
 Government: administrative reform, 
 121-22; aid to industry, 106; budget, 
 92-97 passim; budget reform, 122; 
 colonial, 27; Development Agency, 
 189; economic policy, 82-88 passim, 
 108-9, 123, 153; fiscal policy, 95, 99, 
 100, 122; Public Administration 
 Commission, 121, 122; revenue from 
 petroleum, 170; role in economy, 79- 
 89, 98, 150, 153 
 
 Graduate training, 64-65 
 
 Gran Sabana, 9, 11 
 
 Grases, Pedro, 249 
 
 Guarico Dam, 8 
 
 Guayabitoid Series, 20 
 
 Guayana: agriculture, 9, 10; descrip- 
 tion, 9, 179, 180; economy, 10; his- 
 tory of, 179; iron deposits, 180; 
 private investment, 187-90 
 
 Guayana Corporation. See Corpora- 
 ci6n de Guayana 
 
 Guipuzcoan Company. See Royal Gui- 
 puzcoan Company of Caracas 
 
 Gulf of Paria, 10, 11 
 
 Guri Dam, 183 
 
 Guzman Blanco, Antonio, 30, 36, 52 
 
 HARDING, Warren G., xiv 
 Heiremans, Eugenio, 141 
 Hernandez Carabano, Hector, 53 
 Herrera, Felipe, 119 
 Hinkle, William, 167 
 History of Venezuela, 23-31 
 Housing, 85, 111-15 
 
 Hull, Cordell, xvi, xvii 
 Humboldt, Alexander von, 79 
 Hydroelectric power, 179, 182-83 
 Hylan, John F., xiv 
 
 ILLITERACY, 36, 37, 69, 101 
 Indians: acculturation, 21; agriculture, 
 16; artifacts, 15, 16, 21; cultures, 
 17-20 passim; food, 15, 16, 17; pot- 
 tery, 17-20 
 Industrialization, 102, 105, 106, 158 
 Industrias Alfareras de Guayana, 188 
 Instituto de la Vivienda Rural. See 
 
 Rural Housing Agency 
 Instituto Venezolano del Hierro y del 
 
 Acero, 182 
 Inter-American Bibliographical and 
 
 Library Association, xv 
 Inter- American Development Bank, 142 
 Inter-American Economic and Social 
 
 Council, 119, 120 
 Inter-American Financial and Eco- 
 nomic Advisory Committee, xv 
 Iron, 9, 84, 164, 180 
 
 JARVIS, Harry, 116 
 
 Joboid Indians, 15, 16 
 
 Joint Center for Urban Studies, 185 
 
 KENNEDY, John F., 86, 125, 144 
 Kubitschek, Juscelino, 118 
 
 LABOR, 85, 116, 117, 127, 160, 208, 
 227 
 
 LAFTA, 145, 146 
 
 La Guayana. See Guayana 
 
 Laissez faire, 81-82 
 
 Lake Maracaibo, 11-13 
 
 Lake Valencia, 6 
 
 Land tenure, 214, 224, 226 
 
 Landworkers Federation of Venezuela, 
 116-17 
 
 Larrazdbal, Wolfgang, 53 
 
 Latifundia, 225 
 
 Latin America: balance of trade, 242; 
 domestic investment, 142; foreign 
 investment, 172; housing, 112; po- 
 litical instability, 134-35; population, 
 112, 212 
 
 Latin American Free Trade Associa- 
 tion. See LAFTA 
 
 Law of Mines and Hydrocarbons, 82 
 
 League of Nations, xv 
 
300 
 
 The Caribbean : Venezuelan Development 
 
 Llanos, 4, 7, 8 
 Llanos de Apure, 19 
 Llovera Paez, Luis Felipe, 52 
 L6pez Contreras, Eleazar, 52, 201 
 L6pez Mateos, Adolfo, 143 
 
 MACHADO, Jose E., 248 
 
 Manioc, 17 
 
 Margarita Island, 20 
 
 Martinez de Porras, Francisco, 51 
 
 Martinez Paz Castillo, Matilda, xii 
 
 Massiani, Felipe, 250 
 
 Medina Angarita, Isaias, 57, 227 
 
 Memoid Series, 20 
 
 Mendoza, Eugenic, 127, 141 
 
 Meso-Indians, 15, 16 
 
 Mexico, 143 
 
 Minas de Naricual, 182 
 
 Monagas, Jose Gregorio, 30 
 
 Monagas, Jose Tadeo, 30, 52 
 
 Monroy, Lorenzo, 125 
 
 Moscoso, Teodoro, 171, 240 
 
 Muiloz-Marin, Luis, 125 
 
 NATIONAL Agrarian Institute, 216, 
 
 229-31 
 National Boards of Production, 222 
 National boundaries, xxi, xxii 
 National Farm Development Plan, 124 
 National income, 83, 90 
 National Planning Commission, 123 
 National University Council, 55 
 Natural resources, 84, 180, 188 
 Neo-Indians, 17-20 
 New York Times, xiii, xiv 
 Nueva Cadiz, 21, 24 
 
 OCUMAROID Series, 18 
 
 Ojeda, Alonso de, 4 
 
 Operation Pan-America, 118 
 
 Organic University Statute, 52 
 
 Orinoco Delta, 8, 17, 18, 20 
 
 Orinoco River, 10, 11, 179-88 passim 
 
 Orinoco Steel Plant, 183-85 
 
 Oropeza, Juan, 52 
 
 Oropeza Castillo, Alejandro, 127 
 
 PAEZ, Jose Antonio, 30 
 Paleo-Indians, 14, 15 
 Pan American Conference on Neutral- 
 ity, XV 
 Pan American Union, xi-xv passim 
 Pardos, 27, 28 
 
 Parra, Manuel German, 143 
 
 Payaras, 7 
 
 Pearl fisheries, 21 
 
 Peasant Federation of Venezuela, 227 
 
 Per capita income, 160 
 
 Perez Guerrero, Manuel, 123 
 
 Perez Jimenez, Marco, 52, 91, 92, 228 
 
 Peronistas, 135 
 
 Petroleum, 12-13, 180 
 
 Petroleum industry: development, 170; 
 distribution of profits, 102; employ- 
 ment in, 219; foreign exchange earn- 
 ings, 84; influence on economy, 31, 
 158-59; productivity, 164; taxes, 170 
 
 Philip V, 50 
 
 Phillips Petroleum Company, 187 
 
 Planchart, Enrique, 249 
 
 Population: age distribution 31, 205, 
 218; ethnic groups, 27, 28; growth 
 rate, 38, 218; health, 105; infant 
 mortality, 105; life expectancy, 101; 
 migration, 219, 239; urban-rural dis- 
 tribution, 41, 204 
 
 Pottery, 17-20 
 
 Private schools, 67-75 
 
 Profit sharing, 165 
 
 Public Administration Commission, 
 121, 122 
 
 Puerta Flores, Ismael, 53 
 
 Punta del Este, 38, 117, 118, 163 
 
 QUADROS, Janio, 134 
 Quibor, 18 
 
 RANCHO Peludo, 16, 17 
 Ravel, Carola, 128 
 Revista nacional de cultura, 250 
 Rowe, Leo S., xi, xvii 
 Royal Guipuzcoan Company of Ca- 
 racas, 25, 26, 197 
 Rural Housing Agency, 113 
 
 SALADOID Series, 20 
 
 Samper, Alberto, 141 
 
 Sanchez, Manuel S., 247 
 
 Santa Maria University, 51 
 
 Santo Tome de La Guayana, 180, 185- 
 
 87 
 Sears Roebuck de Venezuela, 165-66 
 Seminary College of San Buenaventura, 
 
 51 
 Seminary of Santa Rosa, 68 
 Sierra Nevada de Merida, 5 
 
INDEX 
 
 301 
 
 Solo, Francisco de, 141 
 
 Steel, 183-85 
 
 Suarez Flamerich, German, 52 
 
 TAXATION, 93-94, 96, 122, 170, 241, 
 
 242 
 Technical assistance, 165-66 
 Tierroid Series, 18 
 Tocuyanoid Series, 18 
 Tridentine Seminary of St. Rose of 
 
 Lima, 50 
 Tucacas, 18 
 
 UNESCO, 41 
 
 United States: investment in Latin 
 
 America, 134 
 United States Steel Corporation, 187 
 Universities: academic freedom, 54; 
 administration, 54-55; autonomy, 
 50-66; enrollment, 56; facultades, 55, 
 56, 62; financial support, 54; Na- 
 tional University Council, 55; stu- 
 dent revolts, 52, 53 
 University City, 57-58 
 University of Carabobo, 51, 56 
 
 University of Lara, 51 
 University of Merida, 51, 53, 56 
 University of Oriente, 51, 56 
 University of San Marcos de Lima, 68 
 University of Zulia, 51, 56 
 Uslar Pietri, Arturo, 52, 197 
 Uti possidetis, xxi, xxii 
 
 VALENCIA Basin, 18, 19 
 
 Valencioid Series, 19 
 
 Venezuela: discovery, 3; climate, 4; 
 
 geography 4-13; history, 23-31; 
 
 origin of name, 3 
 Venezuelan Confederation of Labor, 
 
 117 
 Venezuelan Development Corporation, 
 
 108-9, 204 
 VoUmer, Gustavo, 141 
 
 WARRAU Indians, 17 
 Welles, Sumner, xvi 
 Welser, house of, 25 
 
 YANES, Francisco J., xiv 
 
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