The Economy of Venezuela
Venezuela: Rich in Oil, Poor in Outcomes
Venezuela has the world's largest proven oil reserves, yet its economy collapsed over the past decade, one of the deepest peacetime declines ever recorded.
Venezuela sits on more proven oil reserves than any other country, mostly heavy crude in the Orinoco belt. Yet since 2013, its economy has shrunk dramatically.
Oil dependence
Oil accounts for nearly all of Venezuela’s exports and most government revenue.
The collapse
Real GDP fell by roughly three quarters between 2013 and 2021, an enormous contraction.
Why study it
It shows how resource wealth, poor policy and political conflict can destroy an economy.
A country with vast oil reserves had shortages of food and medicine.
Policy and institutions decide outcomes.
- Venezuela has huge oil reserves.
- GDP fell by about three quarters.
- Oil is nearly all exports.
- Institutions matter.
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