"Rumblings in Venezuela," Alan Riding, The New York Times, March 2, 1989.
summary by Mary Johnson

The political and economic stability of Latin America is threatened by
potentially long and severe debt crises. The drop in the price of oil in
July 1981, after an oil boom in the 1970's, left an overly optimistic
Venezuelan economy with a huge foreign debt and many poor and angry
Venezuelans. The violent rioting and looting, for which the immediate cause
was increased public transportation and fuel prices, was a release of
aggression towards the government for allowing the IMF to indirectly impose
austerity in their country. They had dreams of a prosperous oil industry, an
industry previously responsible for 80% of exports, and were faced with the
reality of inflation, currency devaluations, increased unemployment and a
38% decrease in wages since 1983.

Venezuela was forced to make peace with the IMF now, as opposed to in years
past, because rather than suspending payment to creditors on debts, like
other Latin American countries, it depleted its foreign exchange reserves to
finance payments. So now the reserves must be replenished if their is any
hope of future economic success and the IMF is needed to do so.

Perez had campaigned with publicized intentions of requesting help from the
IMF. As the oil success and large foreign exchange fund Venezuela depended
on were lacking in sufficiency it should have been obvious that they would
have to accept some terms from the IMF for their country to obtain funds
needed for economic recovery. Currency devaluation, an increase in interest
rates, reduction of the budget deficit and dramatic price increases were all
necessary evils to achieve good standing with the IMF. Unfortunately, these
measures are understandably unpopular with the Venezuelans and
implementation of these programs lead to violent uprisings that resulted in
dozens of deaths and hundreds of injuries.

This political and economic unrest was devastation to Perez's lifelong
career as a politician. His reputation as the president during the period of
great economic growth in the 1970's had earned him international prestige,
but he would now be forced to rectify a domestic crisis rather than have an
active role in international politics. His attempt to establish good
standing with the IMF would require him to find a way to pay off $25 billion
in debt service (50% of export earnings and equal to the total debt of the
private sector debt) between 1984 and 1988.