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Oil, politics, and economic policy making: Venezuela and the Andean Common Market

Published online by Cambridge University Press:  22 May 2009

William P. Avery
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Abstract

Venezuela's entry into the Andean Common Market (ACM) represents a case of systems transformation. Venezuelan membership has led both to major changes in economic provisions of the Common Market, and to significant alterations in political relations among members. Analysis of these changes depends on an understanding of the political debate in Venezuela, which was prolonged, and which led to membership under favorable terms earned through hard negotiations. Any assessment of the ultimate impact of Venezuelan participation in the ACM must remain guarded. As a wealthy and dynamic member, Venezuela could become an important catalyst for integration in the region. But with its superior economic capacity, Venezuela could also come to dominate the integrative effort, accruing most of the benefits to itself and in the process creating disruptions and dissatisfaction among the other members.

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Articles
Information
International Organization , Volume 30 , Issue 4 , Autumn 1976 , pp. 541 - 571
Copyright
Copyright © The IO Foundation 1976

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References

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2 Lindberg, Leon and Scheingold, Stuart, Europe's Would-Be Polity (Englewood Cliffs, N.J.: Prentice-Hall, 1970), p. 137 and Chapter 7. Systems transformation may also refer to major changes in the scope of authority of the economic community-i.e., functional as well as geographicalGoogle Scholar.

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6 Venezuela is the only place in Latin America where most private sector interest groups are organized into one large organization. FEDECAMARAS is made up of associations from all sectors of the private economy-banking (The Bankers Association), oil (Chamber of Petroleum Industry), commerce (Caracas Chamber of Commerce), and agriculture (Ranchers and Livestock Association). It is by far the most powerful private interest group in Venezuela. (Lott, Leo B., Venezuela and Paraguay: Political Modernity and Tradition in Conflict [New York: Holt, Rinehart and Winston, 1972])Google Scholar.

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14 On this point, see ibid.

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18 Besides conceding on the question of trade liberation and a common external tariff, Caldera also adopted FEDECAMARAS' position on the two-thirds majority voting formula, supporting a standing veto for each nation.

19 Clark, p. 534.

20 Business International Corporation, p. 6.

21 See Producción, June 1970, pp. 10–11.

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23 For the text of the statement, see Comercio Exterior (Mexico), 10 1969, p. 27Google Scholar.

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28 Highlights of the report are summarized in Business Latin America, June 1, 1972, pp. 173–74. The report was originally intended as a confidential document for internal use only. However, a summary of its findings was leaked to the press, with what many believe was the approval of Colombian governmental officials.

29 Ibid., pp. 173–74.

30 Latin America, May 5, 1972, p. 141.

31 Business Latin America, June 1, 1972, p. 174. Colombia favored Venezuelan membership for more than just economic reasons. Venezuela was seen as the ideological “balancer” to the more leftist regimes of Chile and Peru.

32 Business Latin America, October 5, 1972, p. 315.

33 For the full text of the common investment code, see de Venezuela, Republica, Regimen Común de Tratemiento a los Capitales Extranjeros y Regalias (Caracas: Instituto de Comercio Exterior, n.d.). An English translation is reprinted in Journal of Common Market Studies, 10 (June 1972): 339–59Google Scholar.

34 Wendell, George, “ACM's ‘Fade-Out’ Formula Through Venezuelan Eyes,” Business Venezuela, November-December 1971, p. 17Google Scholar.

35 Concerning the secrecy of these final negotiations, see Andean Air Mail and Peruvian Times, February 16, 1973, p. 2.

36 Latin America, February 16, 1973, p. 54.

37 See the special issue of Grupo Andino (num. 21, 02 1973) for the complete text of Decision 70 and related documentsGoogle Scholar.

38 Bolivia and Ecuador are also allowed 30 additional exemptions against Venezuelan products. The date for completing region-wide tariff reductions represents a two-year extension agreed to in April 1976.

39 The veto was also extended to cover regional rationalization and specialization programs for existing industry. The voting formula for deciding these questions, as well as those relating to the common external tariff, previously had allowed for a veto that could be overridden on a second ballot, provided no other member cast a negative vote. They now come under, what amounts to an absolute veto.

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45 The New York Times, January 19, 1971.

46 Ibid.

47 Some observers believe this feeling had its origins in events which occurred during a government-sponsored seminar on integration held in August 1971. Convened to specifically take up the question of Andean integration, the government used the meeting primarily to isolate FEDECAMARAS as the principal opponent of Venezuelan membership. FEDECAMARAS emerged as the only important economic organization opposing participation in the Andean market. As an indication of Caldera's skillful maneuvering, leaders of the prointegration Acción Democrática party did not attend the seminar because they thought Caldera intended to use it as a forum for attacking the Andean effort. Ironically, for this same reason, FEDECAMARAS was probably “lured” into the conference thinking that the government planned to reaffirm support of its objections. For a complete report on the conference, see CORDIPLAN, Foro national sobre Venezuela y la integration latinoamericana-informe final (Caracas: CORDIPLAN, 1971)Google Scholar.

48 A point that perhaps should not be overlooked is the possibility that the Venezuelan government “used” the private sector to extract concessions from the other Andean countries.

49 See, for example, Anderson, Charles W., Politics and Economic Change in Latin America: Vie Governing of Restless Nations (Princeton: Van Nostrand, 1967), pp. 126–31Google Scholar; and Astiz, Carlos A., Pressure Groups and Power Elites in Peruvian Politics (Ithaca, N.Y.: Cornell University Press, 1969)Google Scholar.

50 Blank, p. 216.

51 Ibid., p. 217.

52 Clark, p. 540.

53 Blank, p. 238.

54 Ibid.

55 Anderson, p. 103.

56 Ibid., p. 131.

57 Latin America, No. 9, 1973, pp. 355–56Google Scholar.