86 grew to more than 6 percent in 1988. The drop in oil prices caused oil income to decline as a percent of total revenue. From a high of 90 percent of total export value in the early 1980s, oil revenues provided about 55 percent of total revenue by 1988.
Despite the decline of oil revenues during the 1980s, the Venezuelan government was experiencing tremendous growth. Total government spending soared to about 23 percent of GDP in 1988 (Haggerty, 1993, p. 85). A significant number of Venezuelans either worked for the government or had extensive connections with it via relatives who were government employees. Critics of the government contend that nepotism, corruption, fiscal irresponsibility, and neglect of public services was common.
During the late 1980s, the government of President Carlos Andres Perez pledged a policy of privatization to reduce the role of government in the economy. Profound policy reforms, including price increases were also enacted. Economic activities were oriented toward the free market. Perez's government also made efforts to stimulate foreign investment. In 1989, the Venezuelan masses reacted to these reforms with rioting and looting. This civil disobedience represented the country's worst violence in 30 years.
Privatization of the oil industry has been one of Venezuela's most ambitious efforts. The oil industry has dominated the country's economy throughout the twentieth century. During the peak of its production in 1970, Venezuela was the world's largest exporter of petroleum.
The country's national petroleum company is the Venezuelan Petroleum Corporation (Petroleos de Venezuela, SA--PDVSA). This company is the world's third largest international oil conglomerate, with refineries and service stations in North America and Europe. The United States is Venezuela's leading oil export recipient. The oil industry, although nationalized, operated relatively autonomously in Vene...