VENEZUELA: A Riches to Rags Story


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By William McEntire, Contributor

Venezuela, the new pawn for anti-socialist rhetoric, might have developed far different from the way it is viewed today.  The country has been rich in resources but poor in leadership over the years.

Recent data from OPEC (Organization of the Petroleum Exporting Countries) shows Venezuela’s oil reserves not only rivals, but actually surpasses, the reserves of Saudi Arabia.  Each country has largely focused on their centralized production of oil, but Saudi Arabia’s 71% of exports in the industry is meager in comparison to Venezuela’s 91%.  The oil industry’s global prices largely fluctuate, and the impact of recent decreases in price has been harshly suffered by the Maduro regime and its people in Venezuela as they lack any backup for economic stability.

Going back to the colonial days, Venezuela was a large exporter of cash crops including sugar, coffee, and cocoa. But, as a result of the discovery of oil reserves, and the rich promises therein, these once-profitable crops have largely been neglected.

During the mid to late twentieth century, several increases in the price of oil outweighed any thought for the Venezuelan government to look for any other source of income.  The oil industry in Venezuela was nationalized in 1976, banishing outside firms, but hiring many of the previous firm’s executives, and it ran smoothly for many years. After price decreases in both the 1980s and 1990s effectively devastating Venezuela’s uniform economy, Chavez was elected.  

The issues for Chavez began early as he began replacing powerful threats, namely Luis Guisti, head of Venezuela’s oil industry.  These removals inevitably meant new appointees without proper experience in the oil industry. Eventually political appointees led to unrest, culminating in a coup and strikes in 2002, further decreasing Venezuela’s oil production.  Following the unrest, Chavez again consolidated his power over the oil industry by firing over 18,000 workers.

Unlike Chavez and his predecessors, Maduro rules more like a headless chicken; he does not rule with an iron fist. Maduro, while in power, has been in a constant tug of war between more power and a façade of less power, all while attempting to continue the Chavez dream of a socialist Utopia powered by oil.  Over the last three years, real GDP for Venezuela has fallen by double digits, not to mention the projected surge in inflation of one million percent .  Maduro has maintained control over the Venezuelan judiciary system, which, since the beginning of his reign, has sided with him in his controversies with the National Assembly.  In 2017, Maduro attempted to replace the Chavez era creation with the National Constituent Assembly (Asamblea Nacional Constituyente, or ANC) which is not internationally recognized .

Maduro’s party has failed to maintain control over the National Assembly, leading to opposition leader Juan Guaido claiming interim president status in recent months.

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