1

Land Reform in Venezuela, Chile and Peru – A Comparative Analysis Rigoberto Rivera, PhD

1.

Acción Campesina2, Venezuela

Introduction

This paper is a written version of the presentation delivered during the International

Conference on “Agrarian Questions and Comprehensive Solutions”, March 4, 2014, held

in Kathmandu, Nepal, on the land reforms processes carried out in Venezuela, Chile and

Peru, from a comparative pint of view, focussing on learning and results. Some additional

information was introduced to highlight certain points.

The first and more important issue to considerer about land reform in Latin America is

that it was one of the battle fields of the Cold War, which was at its peak in the beginning

of 1960’s. One important element was the Cuban revolution, which side up with the

Soviet Union. In 1961 Cuban troops and members of Venezuelan communist party

invaded Venezuela with the intention to raise poor peasants and conduct a similar

revolutionary process to that carried out in Cuba few years earlier. Venezuela, which was

the biggest oil supplier for the USA at that time, would have been a terrible loss for the

USA, and also a source of preoccupation for other Latin American countries which were

experimenting signs of possible guerrilla warfare. So, most countries panicked and in

1962 call for a Continental Presidential Conference, which was held in Uruguay.

In the Conference it was agreed that in most Latin American countries the existence of a

large poor sector in the rural areas would be a constant threat because the possibility of

guerrilla insurgency. Land reform was seen for most countries as a palliative to slow

down that threat. Also the USA launched a support initiative named “Alliance for

Progress” to support rural and urban social and economic development in the Latin

American and Caribbean countries.

Following the 1962’s Conference in most Latin American countries began land reform

processes, of various kinds depending of the country characteristics. The countries were

the land reform was intended to produce a structural change were Venezuela, Chile and

Peru, that began the process in that order. Other countries carried out more limited rural

reform process. In two countries, Mexico and Bolivia, land reform had already been

carried out as a result of national revolutionary processes, in 1910 and 1952, respectively.

Characteristics of the three countries

All three countries were very different during the 1960’s decade. Venezuela and Chile

were countries with few amount of population during the early Colonial times. Most of

population in the XX century was made up of immigrants mixed up initially with

indigenous population. Venezuela had an important black slave population. During the

XX century an extensive civil war damaged the economic structure, while Chile had been

a country fairly stable. At the begging of the XX century the Venezuelan economy war

based on agriculture and industrial and urban development was minimal.

1 The author is a member of Acción Campesina. He has experience doing research, training NGO and

public institutions, and performing consultancy work, in all three countries and several others in the region. 2 Acción Campesina is a NGO that provides support to the peasantry. It’s an International Land Coalition

Member. It’s also a member of ALOP, a network of NGO from most Latin American countries.

2

In Chile the mining industry developed the economy before 1900 and urban development

was significant (50% of population was urban), and was also an agricultural exporter

until the 1929’s global crisis. Chile, because of having acquired the monopoly of saltpetre

production, a mineral used as fertilizer and also to make gunpowder, became one of the

richest countries in the world.

Nevertheless, the sudden richness of Chile very rapidly destroyed the fairly advanced

industrial and agriculture and social structure of the country and by 1910 it was

considered one of the most unequal countries in the world. In Chile the agricultural

sector, from been an exporting economy with economic relationships with England,

California and Australia from middle XIX century, decayed rapidly after 1890 and most

previous modern relations of production became slowly extinct and were replaced by

sharecropping and renting land agreements, favouring landless former wage labour

workers in the haciendas. Land owners have migrated to highly paid jobs in the mining

industry and the State bureaucracy. Also large number of ex-agricultural wage labour

became mining workers. This situation is known as the “dutch disease” which is the

negative impact on an economy of anything that gives rise to a sharp inflow of foreign

currency, such as the discovery of large oil reserves or high valued mineral or other high

prices goods, as tulips in Holland. The currency inflows lead to currency appreciation,

making the country’s other products less competitive on the export market. It also leads

to higher levels of cheap imports and can lead to deindustrialization and unemployment.

Usually it is the agricultural sector which suffers more (Jedtanovic, 2011:299)3.

Something similar happened in Venezuela during the 1940’s when large oil production

makes agriculture unprofitable and landowners became part of the State bureaucracy and

employees in the oil companies. The “dutch disease” pulled out from agriculture most

producers, as well as a substantial part of the labour force, making the sector poor and

remaining peasants a very deprived social sector.

In Peru the economic process was different. The country during the colonial times was

one of the four Spanish viceroys. Its economy was based in the exploitation of large

population from the Inca Empire and used to dig out minerals, mostly silver. The

economy did not suffer main transformations during the XIX century. By the beginnings

of the XX century urbanization was very limited and most population was in the rural

highland Andean communities villages, which looked as small towns. There were not

dispersed population. Some of the villages were free holdings land communities, while

others communities, about half of the total, their lands, along with the population inside,

have been integrated into large “haciendas”, where the owner usually ask for a rent to

peasants, while peasants perform agriculture as individual holdings. In both cases

irrigation was collectively managed by peasants in collective type irrigation committees.

Also commerce and other services developed in these small towns. In the costal region,

large irrigated valleys have been cultivated since before the Inca Empire, where large

exporting large holdings existed since early colonial times specialized in the production

of sugarcane and cotton. All haciendas work force was based on black slave labour.

3 Jeftanovic, Pedro (1992) El síndrome holandés: teoría, evidencia y aplicación al caso chileno (1901:1940).

(The Dutch Disease: Theory, evidences and application to the Chilean case). Revista de Estudios Públicos,

No. 45. Santiago, Chile.

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Purposes of the land reform

The objectives of the land reform, in general terms, were:

1. Appease poor peasants in order to refrain join the guerrilla groups.

2. Also put abandoned land or under pre-capitalist forms into production.

3. In all countries there was a genuine purpose to make justice for the people left

behind by the development processes, which mostly favoured people concentrated in the cities.

4. Other important objective was providing cheap food for urban dwellers.

5. Stop or at least slow down migration from rural areas to the cities.

6. Finally, in all three countries there was the purpose of limiting the development of

capitalism through building a cooperative production system in the countryside.

The laws of land reform were very similar in all three countries. The one was provided

guidance was the Venezuelan law issue in 1962. The main aspects were:

1. Promote cooperative forms of production:

a. One named “asentamientos campesinos” (peasant settlements), based on

the Israeli “moshav”. The asentamiento was created dividing large landholdings in family sized plots.

b. The other one were “peasant enterprises”, based in the Israeli “kibbutz”,

were the entire large holdings was administered as a single units. Usually

this was the case of very integrated previous haciendas were division

would damage production.

2. The law, in all three countries, established that after a four years trial period the

“asentados” (beneficiaries) could choose between continue with the “cooperative

form of production” or ask division with individual parcels with full private

propriety titles.

Finally, yet some analysts would not support this idea, it is a fact that in all three

countries the conservative social sectors were weak at the time in the political structure.

In Venezuela it is clear the importance of the State bureaucracy controlling the only

important economic resource in the country, the oil industry. In Chile there was a large

increase in the power of State in the economy, particularly since 1938 when a leftwing

alliance of the Radical, Socialist and Communist parties held three consecutives

presidential periods. In Peru the old aristocracy base on the traditional haciendas was

becoming extinct and new urban social classes based on commerce, medium sized

industry, as well as modern cooper mining, and the state bureaucracy, along with a very

powerful military sector, were leading the political orientation of the country.

All new urban social classes in the three countries coincided in a view of the countryside

as a backward sector, particularly in Peru, that should be incorporated in the national

economy by means of State intervention and investment.

In that moment in Latin America was accepted the idea that defence not only concerned

protecting the borders but also strengthening the economy and social structure of the

countries as well as it was emphasized that one of the role of the army was to educate and

introduce civilisation to faraway regions of the country.

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Other element that provided a direction on the role of the State in the changes was the

relative good behaviour of public managed enterprises of that time, particularly in Chile,

a process that became an antecedent about the nature and orientation of the economic

reform that was forced into the countryside.

The UN-ECLAC (United Nations - Economic Commission for Latin America and the

Caribbean – CEPAL in Spanish) put all those ideas in a development theory that stressed

the leading role of the Entrepreneur State in economic development. This theory

dominated economic policies from the 1950’s through the 1970’s decades. It was known

as the “cepalian theory of economic development”.

First phase: 1960’s to 1975’s

All three land reforms were very radical, since it intended, in most cases achieved, the

expropriation of all land in the hand of large and medium sized large holdings, both

traditional and modern ones. That was done for governments that after the initial phases

of the reform began more radical transformations aimed to produce a new economic

structure in all three countries.

The land reform in Venezuela, from 1962 until the end of 1970’s expropriated some 10

million hectares. Also there were lands in the hands of State institutions, such as

municipalities, called “ejidos”, for some 3.5 million. As in the other countries, the rapid

expropriation process provoked a great production process, since there was still a

productive sector, particularly cattle rising. The new land reform cooperatives integrated

by non-trained people, was unable to maintain the level of production. A new impulse

was given to importation of foods.

In 1964 began in Chile the land reform by a centre-party, which ideology stated that the

economy should be “no capitalist neither communist”. Some 60% of the total agricultural

land was affected by the land reform process. The Israeli’s moshav and kibbutz models of

enterprises fitted perfectly with such ideology. An important number of large haciendas

were expropriated up to 1970, comprising some 3.6 million hectares, accounting for 13%

of agricultural land. The following government, more clearly socialist, expropriated the

reminder land, some 5.5 million hectares, summing up both governments around of 10

million hectares4, out of a total 16 million hectares, and comprising more than 95% of all

large and medium sized land holdings. The other 40% was already in small and medium

sized land holdings.

Before 1970 the asentamiento model was privileged abut after the socialist government

imposed the kibbutz model, creating Centres of Land Reform (CERAS), as a collective

enterprise. The change was a consequence that the government bureaucracy thought that

family sized small farms were seeds of a possible new capitalism in the countryside.

The late 1950s and early 1960s witnessed a massive upsurge in rural unrest in highland

Peru. Confronted with this social unrest, Peru’s major political parties incorporated some

commitment to land distribution in their manifestos for the 1963 presidential election. In

1964 the Agrarian Reform Law 15037 was passed oriented to expropriated old non-

productive traditional haciendas. For a variety of reasons the reform was only slowly

4 About 730,000 hectares were irrigated land (60% of total irrigated). The rest expropriated was rain fall

arable land and pastures.

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implemented and little progress had been made when the government was overthrown in

1968 by a military coup led by General Juan Velasco.

The new government committed itself to perform an “authentic” land reform, using the

new Law 17716 of 1969. A main objective was to increase rural productivity accelerating

expropriation in the Sierra. The new Law allowed expropriating also the large modern

exporting estates of the coast producing cotton and sugarcane. This phase of land reform

in Peru was implemented under an ideology developed by the military a decade before. In

1950 the military created the Centro de Altos Estudios Militares (CAEM) (High Military

Studies Centre), with the purpose of training military in political issues.

CAEM was very important in the creation of the development theory that claims a crucial

role of the State in the development effort. This institution had a great influence not only

in Peru but in the all region. Graduates from CAEM were the military officials that in

1969, based on these ideas, began a revolutionary the land reform to abolish capitalism

and develop a “cooperativist” mode of production.

Between 1969 and 1991 some 38% of the country land was expropriated from estates,

rice mills and sugar refineries; all land holding larger than 150 hectares in the coast and

between 15 and 55 hectares in the Sierra were expropriated without exception. The

military land reform “in its first ten years expropriated 15,000 properties (totalling nine

million hectares) and benefited some 300,000 families.

In addition to expropriating haciendas, rice mills, and sugar refineries, the military

government established a special Agrarian Tribunal to deal with peasant grievances, and

a political institution, the National System for Social Mobilization (SINAMOS), to

oversee the reforms and educate people on the new economic model. “The most

sweeping measures were carried out while Velasco was still in power (1969-1975)”5.

Second phase: 1975’s to 2000

The second phase was characterised by the end of the expropriation process in all three

countries. However, the way it was ended and the role of the peasants were very different

in each country.

One important element that characterized this period is the financial crisis of 1982-1983

which had a great impact on the local economies. The 1980’s decade is also known as the

“lost decade”. In the Venezuela case, the crisis was preceded by the 1973’s oil rise of

prices, that jumped from some $3 to $30 a barrel6. The gross national income increase a

great deal, and furthermore, the government considered that was unfair that such richness

continue in the hand of foreign companies and in 1974 nationalised oil companies.

In Venezuela the last expropriations took place by the end of the 1970’s. In the following

two decades there was the intention by the State to consolidate the asentamiento’s

cooperative production. The other more collective forms of production organisation did

not survived and became also asentamientos. An important element to considerer in

Venezuela, which was different from the other two countries, it is that no private titles of

5 La Serna, M (2010) Living to Tell the Tale: Peruvian Agrarian Reform as Told by its Protagonists.

Review of Mayer, E. (2009) Ugly Stories of the Peruvian Agrarian Reform, www.ncsu.edu/project/

acontracorriente University of North Carolina—Chapel Hill. 6 All money related figures with the sign $ indicates USA dollars.

6

their parcels were given to peasants. The State invested significant amounts of money to

increase production, such as credits (peasant could not have bank loans), infrastructure

and machinery, and particularly, direct support by providing technical and machinery

personnel to sow the land, which was considered as training programme. These support

activities suffered much from the financial crisis and many areas were under production

levels during most of the 1980’s decade.

The economy of Venezuela, based a great deal on the oil revenues, suffered the fall of oil

prices in the 1980’s and 1990’s, and process of decay and poor sectors began to develop

in the country. Life quality reduced and new parties and revolutionary social movements

had a fertile field to grow. The production of foods stagnated, because lack of State

money to continued financing land reform enterprises, but as the population continued to

expand, also importing of food got bigger.

In Chile in 1975 the land reform changed in a way that is known as the “counter reform”

and is named that way because social and political analysts have considered that the

division of asentamientos into family plots was against the land reform process. In fact,

the original land reform law established division as the main option if peasant decide to

proceed with, and in fact during the period previous to the 1973’s military coup d’état,

peasants in the asentamientos were asking to apply the law that established the four year

trial period, but the government denied that and continued supporting the asentamiento

organisation.

By middle 1975 the new military government decided to apply the law and offered the

peasants the option to continue in the asentamiento or have the land divided into family

parcels, which would be acquire with a 20 year time bank loan. Not a single

asentamiento, in an open balloting, choose to continue with the asentamiento. More than

40.000 parcels were assigned. The division of asentamiento into parcels according to the

land reform law completed the land reform process in Chile.

At the same time legislation was issued to encourage exporting agricultural products as

well other economic and institutional changes, such as privatisation of ports management

to increase efficiency. Very soon a strong capitalist agrarian structure began to

consolidate along with significant increments in food exports. Whereas in 1970 Chile

exported only $33 million in agrarian products (animal, agriculture, forestry), by 1990

that figure had jumped to $2,029 million. By the year 2000 agrarian Chilean exports rose

to $4,976 million. These figures do not included manufactured goods based on raw

products from the agriculture, livestock, and forestry sectors, as well as fishing products

(fresh or processed) (Ministerio de Agricultura - ODEPA stats).

In Peru the process was similar, only about ten years after. The land reform began in

1969 and the division of asentamientos, cooperatives and other forms of production,

occurred in 1983-1984, a great deal as a result of the international financial crisis.

Confronted with heavy debts from financial institutions, peasants decided by themselves,

yet with a mild opposition from the government, the division of cooperatives into family

parcels and assumed financial debts individually.

A great deal of analytical studies has been published, most of them claiming that the land

reform was reverted and failed. However, there are at least some analysts that have a

different view, as Enrique Mayer who concluded that “It had become impossible to build

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a more collective and egalitarian dream on the basis of a capitalist system with extensive

land use coupled with costly machinery, highly technical systems of production for a few

industrial crops, extreme vulnerability to price fluctuations, and constricting state policies

and interventions. Faced with the option of losing everything, the workers of the

cooperatives finally took General Velasco at his word. He had said, and this is quoted all

over, “La tierra para quien la trabaja” (Land for who work it), which is exactly what they

did and so they took it. The 563 cooperatives of the agrarian reform are now a brief blip

in the rural history of the country. One million cooperativistas are now parceleros with

about three to six hectares per family. The smallholder household economy is now

numerically the largest sector of coastal Peru and it has about half the irrigated fertile

land” (Mayer, 2011:33)7.

Many of these small holding proprieties were afterwards introducing modern machinery

and techniques, producing high quality products, both for the internal market and

exporting. By the end of 1990’s Peruvian agriculture became the largest exporter of

asparagus in the world, mostly based in the coastal peasant agriculture. Sugar cane, rice,

cotton, as well as vegetables and fruits, are some of the crops produced by these

parceleros. However, some degree of land concentration had occurred. Also in the last 20

years the government have build up a number of large irrigation projects by mean of

tunnelled waterways through the Andes Mountains, in order to drain water from the

humid Amazonian basin into the dry Pacific coast.

This policy is favouring the medium and large sized farms along with industrial-type

investments by leading multinational food producing companies. Join together small,

medium sized and large farm, and a robust agro-industrial structure, the government is

intending to make Peru one of the largest food producers and exporters in the world.

Third phase: 2000 to now

In Venezuela, since the year 2000 a new cycle of expropriation was carried out by the

Chávez government. The expropriation process affected mostly land not considered by

previous land reform and now being cultivated by modern producers and well as cattle

ranching enterprises. Some 7.5 million hectares were affected. Summing up all land

under State propriety is now 20 million hectares, which is equal to the 70% of all arable

and pasture land available in the country. A difference is that now also agro-industrial

facilities, such as poultry farms, rice mills, sugar mills, coffee factories, as well as seed

and fertilizers commerce, were expropriated. The Chávez land reform this way followed

up the 1970’s Peruvian military model of land reform.

A great agricultural crisis arises. An element that illustrates the present little importance

of agriculture is that since 2005 agricultural output is no longer placed in the GNP figures

as an independent item but included in a section along with restaurants and other food

services areas. However, it is estimated that agricultural production decreased 22%

between 2003 and 2010. Specifically, coffee and maize, which were previously important

exporting crops, dropped by 33% in the period considered. Venezuela is nowadays the

only one country in Latin America and the Caribbean region in which agricultural

production decreased in the last 10 years. Importation of food includes a large number of

7 Mayer, Enrique (2011) Democracy in the workplace: Agrarian Cooperatives in the Peruvian Agrarian

Reform. Yale University.

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crops. For example, in 2010 imports of meat from Brazil was $1,600 million. This figure

is some 65% of total food imports by the end of 1990’s. From 2000 to 2010 food imports

has increased 333%, approximately8 to some $13,000 million.

In the Chilean case the opposite situation happened in this period. Currently Chile is an

important supplier of foods to Venezuela. According to Savaria (2008) “The second half

of the twentieth century witnessed a dramatic transformation of the Chilean agricultural

sector. From accounting for only five percent of the value of Chile’s total exports in the

late 1960s, agricultural exports grew to account for more than 30 percent of this value in

the mid 1990s. Using a modified neoclassical growth formulation, we show that the

transformation of the Chilean agricultural sector can be associated with institutional

changes or modifications to the sector’s basic functioning structure. In particular, our

historical review shows that changes in the definition of property rights over land, caused

by the Chilean agrarian reform first and the general economic reform later, seem to have

greatly caused the changes in the sector’s levels of investment and production”9.

Currently Chile is positioned as one of the larger food exporting countries in the world.

By the year 2005 “Chile was a leading producer and exporter of some of the world’s

finest fruits, berries, vegetables, and, of course, its premium wines. Chile is the world’s

largest exporter of fresh grapes (29%), plums (23%); second largest exporter of avocados

(16%). Chile is the fifth largest exporter in the world of wine (5%). Fresh and frozen

meat and fish products puts Chile as the world’s largest exporter of fresh fish fillets

(22%); second largest exporter of frozen salmon (30%) and other frozen fish (10%).

Chile is the fifth largest exporter of frozen pork meat (5%). [Source: Chilean

International Economic Affair Figures 2006; Direcon.].

By 2005 Chile agrarian exports increased to $8,043,000. In 2013 the agrarian sector

exported $15.367.485 (ODEPA statistical bulletin).

In Peru, as in Chile, the free market approach to agricultural development has been

consistently maintained from the 1980’s. In this matter Peru is more liberal than Chile.

Sound economic policies had granted the country the highest GNP increasing in the

region with an average in turn to 6% a year since 1990’s. From be one of the poorest

countries in the region is now in the middle class countries. Land reform was indeed a

crucial element in the modernisation of the country.

In 1993 Peru exported some $230 million of fresh and processed agrarian products; in the

period 1997-2003 exports fluctuated from $600 to $800 million. From 2003 to 2006 there

was a significant increase of exports to $1,800 million. In 2012 Peruvian exports of agro-

industrial products reached the global figure of $5,622 million reaching 158 countries.

After the land reform the area cultivated in Peru have also experienced a great change. In

1980 those crops occupied 1,662,000 hectares. In 2009 the cultivated area was 3,100,000

hectares. And in the following years this cultivated area continued enlarging mostly

because better irrigation systems. By 2008 some 400,000 hectares were dedicated to

8 http://www.altag.net/importaciones-agricolas-han-aumentado-mas-de-300/#sthash.TtvRjX20.dpuf 9 Saravia, Antonio (2008) The Chilean agricultural transformation during the second half of the twentieth

century: A story of institutional change. Department of Economics, American University of Sharjah,

Sharjah, UAE.

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export crops. That figure has doubled by 2012. The country is a great deal self-sufficient

in food and some industrial crops, such as cotton. Food imports10

in Peru are not a

significant issue; among the 20 main imports, in 2010 there were only two food item: rice

and baby prepared food. For 2012 Peru agricultural machinery, fertilizers and other

intermediate raw products, summed up $3,957 million. This represents an agricultural

trade surplus of some $1,600 million for the mentioned year.

Economic and social results

The changes in the agricultural sector in these three countries are not alone. It can be said

that in the development of each country both land reform and other institutional changes

have had a crucial role. In this section a comparative analysis of GNP per capita will be

presented and analysed.

The data will be presented in three groups: 1950-1960; 1980-1990; and 2000-2008. The

year 2015 is included as a reference of estimated evolution of GNP in those countries.

The Venezuelan estimation is based on the hypothesis that oil will maintain current high

prices. It was also included data for some other countries to compare the GNP levels in

the three countries considered with current rich countries.

Table 1: Per Capita GDP - US$ 1990 value Country/Year 1950 1960 1980 1990 2000 2005 2008 2015

Chile 3.670 4.270 5.680 6.401 10.309 12.001 13.185 18.467

Peru 2.308 2.969 4.263 3.008 3.817 4.352 5.388 8.543

Venezuela 7.462 9.646 10.139 8.313 8.433 9.888 10.596 11.050

USA 9.561 11.328 18.577 23.201 28.467 30.481 31.178 55.837

Sweden 6.769 8.792 15.016 17.781 20.710 22.987 24.409 65.168

Switzerland 9.064 12.457 18.779 21.487 22.475 23.259 25.104 82.085

United Kingdom 6.939 8.645 12.931 16.430 20.353 22.518 23.742 40.313

Spain 2.189 3.072 9.203 12.055 15.622 18.194 19.706 31.176

Source: The Geary–Khamis dollar11 www.ggdc.net/maddison/Historical_Statistics/horizontal-file_02-2010.xls

Year 2015: International Monetary Fund. Current dollars.

Starting in the period 1950-1960, when the land reform began, it is possible to observe

that the three countries considered had a GNP in the middle of the table, excepting in one

case, Venezuela, which was one of the top three richest countries in the world. Chile and

Peru had a GNP similar or superior to those European countries of the Mediterranean Sea

such Spain ($2,189). In 1960 Italy, for example, had a GNP of $3,500, while Portugal had

$2,080, both under the Chilean GNP. Peru GNP was higher than Portugal.

The main conclusion from this data is that land reform was not triggered by the poor

economic development of the countries but for other reasons, one of them was the

10 An interesting issue was that while searching information in the Web using the word “food imports for

Chile and Peru” the search leads first to Venezuela. 11 The Geary–Khamis dollar, more commonly known as the “international dollar”, is a hypothetical unit of

currency that has the same purchasing power parity that the US dollar had in the United States at a given

point in time. It is widely used in economics. The years 1990 or 2000 are often used as a benchmark year

for comparisons that run through time.

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perceived12

poverty of inquilinos and the huge economic and social inequalities between

rural and urban areas. In Venezuela land reform was more related to the Cold War

situation. Nevertheless, after 1960, and for reasons which are difficult to identify or

discuss in this paper, Latin American countries economic dynamic failed and the GNP

degraded in relation to other countries, such as those mentioned in Table 113

.

In the 1980-1990 period after finished the expropriation process, the three countries

followed two divergent paths for development. Chile and Peru began a process of

building a new institutional framework based on an unrestricted commitment to private

propriety in the countryside. By the end of the “lost decade” (1990) Chile nearly doubled

the GNP income of 1950. Peru was unable to follow because the great disorganisation

created by the 1983 financial crisis and 10 years of cruel guerrilla warfare against the

maoist group “Shining path”, provoking a fall of the GNP index. Peru began to have a

robust economy from 2000 onwards.

Venezuela, on the contrary, it was barely able to grow in the 1980’s and 1990’s decades,

since oil prices fell down substantially, and the internal economic structure was unable to

produce rapid results. This crisis extended to beyond the year 2000.

Considering the period from 1950 to the year 2008 the differences in economic results of

Chile and Peru, on the one hand, and Venezuela in the other, are significant. Chile was

the most successful in economic development and achieved an increase in its GNP of

260.1% in the period. Peru, in spite all problems, obtained an increase in its GNP in 2008

by 133.4% in relation to that of 1950.

Venezuela, on the other hand, achieved an increment in its GNP of only 41.99% in the

entire period of 68 years. This case shows a clear situation of economic stagnation. The

GNP increases slightly since the year 2000 up to now but it is due only to the substantial

rise in the price of oil exports. A reason for these poor economic results is related to the

fact that for most of the time since 1950’s Venezuelan economy have been under strong

State control, among them, controlled money exchange rate. As a result conditions for

local investment were difficult and, for the same reason, the people of Venezuela

traditionally have taken their wealth outside the country.

From 2015 and beyond, Chile and Peru have been well considered for further increases in

economic development. The expected evolution of GNP for 2015, estimated by the IMF,

is shown in the last column of Table 1. They are very promising for the Chile and Peru

but rather pessimistic for Venezuela.

In relation to social results, all indicators show that Chile and Peru have better conditions

in housing and social infrastructure (potable water and sewage), as well as in health and

12 Perceived, because in the 1960’s, at least in Chile, agricultural employees, called “inquilinos” (tenants),

were not so poor as literature picture them. Inquilinos had the same wage as urban labourers, also social

security benefits (health and retirement pensions), as well as rights to cultivate one hectare of land, raise a

large animal, and free housing and garden plots for subsistence agriculture (at least that was how my father,

an inquilino, was paid his salary in the period 1952-1960- author note). 13 A hypothesis says that nationalist and socialist-like policies provoked a big disturbance in the economy

and created conditions to perpetuate underdevelopment, as opposite to European countries that carried out

capitalist-like land reform and other economic reforms. Also Asian countries, like Korea, Japan and

Taiwan, adopted free trade economies as Europe.

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educational services14

. One problem is that Venezuela’s social indicators include as

employee a substantial number of people living on State subsidies. Chile by reason of

good economic results from 2006 is an OECD member.

Venezuela claims that poverty has decreased in the country, a request that have been

accepted by several international agencies, which ranks Venezuela as the most egalitarian

country in the region, with less relative poverty to other countries in the region, as Chile

for example, using the Gini coefficient. Nevertheless, it is evident that the Gini

coefficient in Venezuela is affected by the virtual elimination of the private industrial

sector and a strong impoverishment of the middle class, employees and small industrial

and commerce sectors, since most enterprises and commerce are now in the State hands

and many of them working under their normal capabilities. Also there are deficiencies in

the statistics system of Venezuela, which is unable to follow up the richness of higher

classes, which have most of their wealth in foreign banks. Also, that the dollar / local

money rate is based on official change ratios, which does not reveal the devaluated

purchasing value of family incomes.

The fact is that currently Chile and Peru have better social services to poor people than

Venezuela, because as less people needs to live with State subsidies, the money saved can

be used to provide other services to the population, such as better education15

and health

services16

. The model developed by these two countries can be defined as capitalist

economies with socialist governments while Venezuela attempts to build up a socialist

economy with a populist government.

Learnings from the Latin American land reform process

The purpose of the workshop and the conference on land reform bringing international

experts was now about other land reform processes and obtain some experiences that

would be useful for Nepal land reform policies.

1. Cooperative forms of production, when are imposed by State for ideological

reasons, have been rejected by Latin American peasants. Many reasons, among

them, the need to secure land propriety to let for their children, make peasants

claim for full private titles. Maintaining peasants in the asentamiento costs dearly

to the Venezuelan government in financial support, technical assistance and many

other expenses. The cases of Chile and Peru, as opposite to Venezuela,

demonstrated that private propriety is a positive factor for economic development.

2. Cooperative indeed exits but usually they are created by farmers to help them with

a specific part of the productive process, such as packing facilities for fruit

producers, milk processing plants, among others, which usually are run as

independent entities with their own management.

14 In 2013 among the 50th top universities in Latin America eight were Chilean (17 million people) and

only two Venezuelan (30 million people). http://www.topuniversities.com/university-rankings/latin-

american-university-rankings/2013 . 15 Chile has a subsidy system named “family ethical income”, which is increased as children improve

assistance to health services and got better grades in the school. 16 In 2000 Venezuela expends only 4% of GNP in health services while Chile and Peru were in the 6%.

Quoted from “Health Services in Latin America and Asia”, by Carlos Molina and Jose Núñez de Arco, by

the Interamerican Development Bank, 2001, Washington D.C. In 2011 Venezuela increased expenditure to

5.2% of GNP, Chile to 7.2% and Peru decreased to 4.8% (WHO Stats).

12

3. Social movements are important to provide support to peasants. However, in most

countries social movements were an instrument of governments to manipulate

peasants. It is necessary for poor rural people to create organisations that represent

the real interest of peasants and landless people.

4. An important element that delays Venezuela agricultural production is the lack of

legal regulation for share-cropping and renting arrangements. It is estimated that

some 20% of land, in any country, cannot be cultivated by their owners because

health or age problems, migration of children to cities, among other reasons. A

legal framework to allow other people to cultivate their land without the risk to

lose it is a crucial factor to improve production. Taiwan’s land reform put special

emphasis on share-cropping and renting legal regulations. In Chile land propriety

of non-rural persons can be cultivated by administration companies on behalf of

the owners.

5. The role of government is to provide a legal framework and enforce it to protect

rights of producers as well as make available support for agricultural production,

building infrastructure, supply technical services, and most importantly, an

institutional framework to facilitate commerce and exports. Protecting production,

as well as peasant’s families, is a crucial factor to improve production.

6. Finally, the urban reform should go in parallel to land reform, since cities are the

core for agricultural production.

a. Presently Nepal is some 70% rural but it is likely that in a short time

period that proportion would reverse, making urban people the majority.

Also that current population would double in a few decades. Any land

reform has to take this fact into account specially dealing with landless

families.

b. Many landless peasants are becoming urban workers, or, works in the

countryside from an urban residence. For at least a proportion of landless

families the best option would be not obtaining a very small parcel of land

but an urban house and employment.

c. Cities can provide commerce services, machinery, packing facilities, agro-

industry, housing and home facilities, health and education, as well as

government services, among other.

The analysis of land reform in Venezuela, Chile and Peru, offers a great deal of

experiences which may enrich the discussions carried out in Nepal in relation to this

issue.