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Summary:
Under populist President Hugo Chávez, first elected in 1998, Venezuela has undergone enormous political changes, with a new constitution, a new unicameral legislature, and even a new name for the country, the Bolivarian Republic of Venezuela. Chávez was re-elected President with a new six-year term in July 2000 under the new constitution. Although Chávez remained widely popular until mid2001, his popularity eroded considerably after that, amid concerns that he was imposing a leftist agenda on the country and that his government was ineffective in improving living conditions. In April 2002, massive opposition protests and pressure by the military led to the ouster of Chávez from power for a brief period. The military restored him to power, but political opposition to his rule continued. From December 2002 until February 2003, the opposition orchestrated a general strike that curtailed Venezuela's oil exports, but was unsuccessful in getting President Chávez to agree to new elections. After months of negotiations facilitated by the OAS and the Carter Center, the Chávez government and the opposition signed an agreement in May 2003 to resolve the crisis. This led to an August 15, 2004, presidential recall referendum that Chávez won convincingly by a margin of 59% to 41%. Chávez's rule was further strengthened when his allies won a majority of gubernatorial and municipal posts in elections held in October 2004. The country's next presidential elections are set for late 2006, and there is a strong chance that Chávez could win another six-year term. The Chávez government has benefitted from the rise in world oil prices, which has increased government revenues, and sparked an economic growth rate of 18% for 2004. Some observers are concerned that Chávez is using his political strength to push toward authoritarian rule. The United States traditionally has had close relations with Venezuela, but there has been friction in relations with the Chávez government, and in 2005, Administration officials have used increasingly strong language to express concerns about President Chávez's actions in Venezuela and in Latin America. A dilemma for U.S. policymakers has been how to press the Chávez government to adhere to democratic principles without taking sides in Venezuela's polarized political conflict. Some observers have expressed concerns that a more aggressive approach could create further estrangement in the bilateral relationship. Since Venezuela is the fourth major supplier of foreign oil to the United States, a key U.S. interest has been ensuring the continued flow of oil exports. Despite friction in U.S.-Venezuelan relations and despite past threats by President Chávez to stop selling oil to the United States, Venezuela has remained a steady supplier of oil to the United States. In the 109th Congress, there has been legislative action on several initiatives on Venezuela. The Senate-passed version of H.R. 3057 would provide up to $2 million in FY2006 for democracy programs in Venezuela. The House-passed version of H.R. 2601
