41 International Journal of Research in Business and Social Science IJRBS Vol.2 No.3, 2013 ISSN: 2147-4478 available online at www.ssbfnet.com Economics vis-à-vis Politics of Venezuela under the Chavez Regime 1998-2012 Ramesh Chandra Das a , Soumyananda Dinda b a Department of Economics, Katwa College, West Bengal, India b Department of Economics, S. K. B. University, Purulia, West Bengal, India Abstract In today’s world most of the countries are following the market rule to determine their economic determinants with some to follow the mixed role of the government. There are a very few countries or states that are following the socialistic nature of development. One such country is Venezuela which has a long history of socialism and the degree of socialism got magnified under the regime of Hugo Chavez. The last election result in favour of Chavez has put some questions before the economists and politicians regarding its grounds. The present study has been framed in line with examining whether the role of economic factors have done the trick for Chavez to regain the presidential power. The study for the period of 1998-2010 has observed that the country has suffered in major economic factors compared to two Latin heroes Brazil and Argentina, albeit he has won the election. The study further observed that there are certain political grounds that played role for the favourable verdict. Key Words: Growth; Inflation; Unemployment; Interest; Debt Ratio; FDI inflow; Life Expectancy; Governance; NED Grants © 2013 Published by SSBFNET 1. Introduction On 7 th October 2012 the entire world witnessed another socialistic nature of ruling that happened for the Venezuelan state where Hugo Chavez retained his dynasty for another six years term up to the year 2018 making a record of 20 years of power as decider, rather dictator, of the state economies, political and social variables. Although the margin of victory for Chavez against democratic Henrique Capriles has been reduced by a significant margin the winning president threw his fist in the air before the thousands of supporters in the roads of Caracas terming this election result as a victory of socialism over the neo liberalism that was a signal of protest to the USA and its allies who tried for long through different channels to campaign against Chavez. The newly elected president made his commitment to lead to his country into a new dimension of socialism which he named as 21 st Century Socialism that will promote growth and development of the country under the control of the state in a new fashion. Like that of China who is following market socialism where the ruling of liberal economy has been allowed for a few years under the strong control by the state authority. China has made considerable growth rates of its production of goods and services amid the turmoil in the so called developed nations where the economies have been run by mode of free market operation. The country has gained huge foreign currencies in terms of huge flow of FDI from different developed nations. a Corresponding author.