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Venezuela Table of Contents


Defense Spending

Although there is some evidence that military spending tightened in response to the fiscal crisis of the 1980s, the process of drafting and approving the defense budget has remained largely closed to public scrutiny. The FAN submitted its budget requests directly to the president through its own comptroller general. Much of the budget was approved or amended by the executive with only limited consultation with the Congress. The heads of the various branches of service reportedly exercised broad control over their budget requests. They were restricted as to the overall level of those requests, however, by several factors. One was the traditionally high percentage of the military budget devoted to salaries and benefits; in times of fiscal austerity, military equipment and readiness suffered disproportionate cutbacks. Another budgetary limitation was the high cost of the entitlements and other benefits accorded civilians; these outlays and the maintenance of a large government bureaucracy also tended to limit the funding available to the military. As a result, the military portion of the overall government budget rarely exceeded 10 percent.

From 1950 to 1986, Venezuelan military spending as a percentage of gross domestic product ( GDP--see Glossary) averaged between 1.5 percent and 2 percent. Increases in this figure in the late 1980s appeared to be attributable to the government's efforts to maintain a stable military budget amid a contracting overall economy. This effort continued a pattern of several decades' standing, whereby during austerity periods the military portion of the budget was cut by a lower percentage than was the remainder of the budget. By the same token, during periods of expanding revenue, military expenditures generally rose by a lower percentage than did other outlays. This pattern indicated a desire on the part of both AD and Christian Democratic Party (Comité de Organización Política Electoral Independiente--COPEI) administrations to insulate the military, at least to some extent, from budget cuts; the comparative restrictions on military expansion during boom times might also have indicated a preference by the civilian executive for limiting the role of the military in the overall government. Even in an established democracy such as Venezuela's, presidents felt compelled to continue a political balancing act with regard to the military.

Venezuela's lack of a significant domestic arms industry and its consequent importation of almost all of its weaponry represented another constraint on defense spending. The FAN attempted to address this deficiency in 1975 by establishing the Venezuelan Military Industries Company (Compañía Anónima Venezolana de Industrias Militares--Cavim). Despite initial expectations of channeling government revenues into the development of a significant domestic arms industry, by the 1990s Cavim had made little progress. Domestic arms production consisted of small arms ammunition, explosives, some spare parts, and coastal patrol craft for the navy. Cavim's development fell victim to the oil revenue crisis of the 1980s and the purchase of big-ticket advanced weaponry such as the F-16 fighter. Further expansion of the domestic arms industry appeared unlikely during the 1990s.

Data as of December 1990