CARACAS, Wednesday April 01, 2009 | Update
The government of President Luis Herrera finds a huge foreign debt incurred by the previous administration in spite of high oil prices since 1974. Two international events mark the year: Nicaraguan dictator Anastasio Somoza is overthrown and the shah of Iran falls as Islamic fundamentalism grows. In Venezuela news of US businessman William Niehous’ release, after being held as hostage for 1,120 days, makes the headlines
Luis Herrera Campíns' administration began amidst serious economic slowdown and a huge foreign debt File Photo: Andrés Mata Foundation /
"I am receiving a mortgaged country," said Luis Herrera Campíns,
the fifth president under democracy, during his inaugural
speech on March 12, 1979. Those words continued to haunt Venezuela
several years later when it woke from the dream of economic
bonanza generated by the oil boom on that infamous date of
February 18, 1983 or "Black Friday" as a result of the bolivar's
Venezuela, like never before, had experienced over the five-year presidency of Carlos Andrés Pérez unprecedented oil prices. But that wealth which seemed endless generated unimaginable effects at the time. The reality in 1979, described by the incoming government, is marred by economic slowdown and a public debt amounting to USD 11.627 billion, according to both the outgoing government and the central bank. The new government, however, based on the Bolinaza report announces that the actual debt is USD 18.604 billion.
Despite having high economic revenues throughout his term, Pérez's party was defeated on December 3, 1978 by a man from the plains of the country, donning a typical Venezuelan hat and a guayabera shirt, leveraged his campaign by focusing on issues like poverty and foreign debt. During his campaign, he ordered a large cage to be built between the towers of Centro Simón Bolívar and called it King Kong's cage, symbolizing the huge debt incurred by the previous government.
At the same time, he popularized a woman leader from the shantytown of Negro Primero in Caucagüita. Carlota Flores and her daughter Aleida Josefina were icons through which Venezuelans peered into a growing reality that had been hiding under the veil of an oil-wealthy Venezuela: poverty.
"I am receiving an economy in bad shape, with great structural imbalances and speculative inflationary pressures, which have highly eroded the purchasing power of the middle class and the countless marginal areas of the country. I am receiving a mortgaged country," said Luis Herrera Campíns, in his inaugural speech before Congress, on March 12, 1979.
One of the most characteristic aspects of the new administration would be the punishment of corrupt officials, and one of the most resounding cases was that of the Sierra Nevada ship involving even the outgoing president.
Over that year, while Venezuela embraces for economic austerity, the fall of the shah of Iran and the advent of the Islamic fundamentalism under the leadership of Ayatollah Khomeini, who proclaimed the Islamic Republic. This series of events led to another spike in international oil prices, which would translate into a prolonged bonanza for Venezuela.
One of the most important events that year is the discovery of the vaccine for leprosy by a Venezuelan doctor, Jacinto Convit.
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