Strength and Sovereignty
VEN90, 2007-2016, 10 VEF

Slot Comment:

Bolivares Fuertes (Strong Bolivar)

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Note Details

  

Set Details
Note Description: 10 Bolívares 2013
Grade: 67 EPQ
Country: Venezuela
Note Number: VEN90d
Signatures/
Vignettes: 		- Wmk: C. Guaicaipuro & 10
Certification #: 8046596-003
Owner: Revenant
Set Category: World
Set Name: Strength and Sovereignty
Slot Name: VEN90, 2007-2016, 10 VEF
Research: See PMG's Census Report for this Note

Owner's Description

At the time it was announced and placed into circulation, at least officially, this note was worth about US$4.65.



In 2000, Venezuela was the world's fifth largest exporter of crude oil, with oil accounting for 85% of the country's exports - inflation was still on the decline. Previous administrations had sought to privatize this industry, with U.S. corporations having a significant level of control, but the Chávez administration wished to curb this foreign control over the country's natural resources by nationalizing much of it under the state-run oil company, Petróleos de Venezuela S.A. (PDVSA). In 2001, the government introduced a new Hydrocarbons Law to gain greater state control over the oil industry - they raised royalty taxes on the oil companies and introduced the formation of "mixed companies", whereby the PdVSA could have joint control with private companies over industry - this kind of mixed state / private ownership with corporate subsidiaries seems common in the gold mining industry.



By 2006, all 32 operating agreements signed with private corporations during the 1990s had been converted from being primarily or solely corporate-run to being at least 51% controlled by PDVSA - just enough for state-control. Chávez also removed many of the managers and executives of PdVSA and replaced them with political allies, stripping the state-owned company of expertise - bad move.



Chavez wanted to make PDVSA his main source of funds for political projects. You know those political allies he was appointing? He made a leftist professor the president of a national oil company - I’m not sure how he thought that was going to work out. He mocked the old executives on TV as he fired them. Anger with these decisions led to civil unrest in Venezuela, which culminated in an attempted coup.



On 11 April 2002, during a march headed to the presidential palace, nineteen people were killed, and over 110 were wounded. Chávez believed that the best way to stay in power was to implement Plan Ávila - a contingency plan that would use the Army to maintain “public order.” Military officers, including General Raúl Baduel, then decided that they had to pull support from Chávez to deter a massacre. Shortly after at 8:00 pm that day, Vásquez Velasco, together with other ranking army officers, declared that Chávez had lost their support. Chávez agreed to be detained and was transferred by army escort to La Orchila. Pedro Carmona - leader of the opposition - declared himself president of an interim government, abolished the 1999 constitution and appointed a governing committee. Protests in support of Chávez along with insufficient support for Carmona's new “government” quickly led to Carmona's resignation, and Chávez was returned to power on 14 April - I am not sure you get to call it a “government” when it is in power for 3 days.



The whole thing did get Chavez to moderate his approach though - for a while anyway. But, while he did this, he started spending money on increasing military capacity and buying AK-47s, Russian helicopters and attack planes from Brazil.



When there was then a two-month strike at PDVSA to try to force a new presidential election, the response was the dismissal of 18,000-19,000 strikers - retirees and the military were brought in to do their jobs. This loss of tens of thousands of critical employees forever damaged a critical national industry. By 2005, the energy ministry said it would take more than 15 years for PDVSA to recover from these events… but that would have been the case if he had stopped digging a deeper hole.



Through all of this, from 2002 to 2012, inflation fluctuated mostly in a range of 15-30% a year. That can be very damaging to a country and an economy - even 10% year-over-year inflation can be very damaging - but, interestingly, through all this turmoil and the deterioration of a key industry - while the world was simultaneously watching Zimbabwe’s economy implode under hyperinflation - inflation was not accelerating or exploding upward in Venezuela. The most likely reason for this is that oil prices were surging, the value of the country’s exports were surging upwards - and everything else was dropping like a rock as the country suffered from a form of “the Dutch disease” - the oil industry was doing well, but it was the only thing doing well. This is considered to have been the third time the Venezuelan caught “the Dutch Disease” in a 90-year period from around 1929 to 2020. In 2000, oil revenue was 51% of state income. In 2006, oil revenue was 89% of state income - and it was solely powering everything Chavez was doing.



I was going to school, starting my undergrad studies in 2005, when a lot of this was going on. Now that I have my degrees I work in and around the Oil and Gas industry and, even now, 15+ years after a lot of this went down, there is a lot of hate and contempt for the Venezuelan government over what happened at the dawn of the 21st Century.



In all of this, there is again and interesting parallel to what happened in Zimbabwe, because it was an attempt to re-shape the agricultural industry of Zimbabwe and redistribute land wealth there which lead to a massive drop in the output from a critical industry, which then started the spiral to economic disaster.



The Bolivares Fuertes notes were mostly issued in two 6-note series that can basically be thought of as a "Series 1" and "Series 2". The "Series 2" notes use the same designs, in the same order of ascending denominations, but with different color schemes and face values. The “Series 1” notes released in 2007 alongside a new group of 7 coins, which included a 1 Bolivar coin. This is the reason the lowest note in this series is the 2 Bolivar note. The government had intended that the "Series 1" notes - which were basically worthless by the time "Series 2" came out (in 2016) - would be withdrawn from circulation. So, these two groups of notes were not meant to circulate together and so there was less perceived risk with people getting the notes confused with each other. The “Series 2” notes came out with new 10 Boilvar, 50 Bolivar, and 100 Bolivar coins that were supposed to replace VEN90, VEN92, and VEN93 with coins. As a result, VEN90 and VEN96 look essentially the same.



The front of this note shows Cacique Guaicaipuro – a 16th century native Venezuelan chief that resisted the conquest of the region by the Spanish until his death in 1568. The back of the note shows an American harpy eagle (Harpia harpyja) with the Ucaima Falls at Canaima National Park in the background. For more information on the design of this note and the significance of the things in it, look at my description for VEN96.



In case anyone ever wonders, the words “pagaderos al portador en las oficinas del banco” under the denomination translate to “payable to the bearer at the bank’s offices.”

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