Just a point that should be important to mention. Things started to go wrong in Venezuela in 1983, when the full economy collapsed during the Venezuelan Black Friday. After that came all the austerity measures and the collapse of the banking system in the 90s. When Chávez took over, in 1998, Venezuela was already in a pretty bad situation; then the Chavismo made it even worse (which seemed impossible at the time).
PS: You do mention it in the article, but I think it might be relevant from the start (and then clarify later).
Yes this is not meant to be a full history of the country, because the resource curse is so obvious that I don’t think we need to go too far. But you’re right that there’s a longer story to all of this. It just that it’s interesting, but it isn’t necessary to understand today.
the Latin American Debt Crisis hit many States hard, like Mexiko and so on...beside this, the same phenomenon /Volcker hits the east european bloc economies hard and there the regimes collapsed at the end of the 80s
I was completely unaware of the specifics when I started writing this, so I didn’t have a position. When you look into what was sanctioned and when, it’s clear the sanctions are not why Venezuela is poor.
Most of the sanctions have been on specific government officials. The first economic sanctions think was in 2016 or 2017. You can see that by then the country was in bad shit. Those sanctions were also not the type of sanctions Iran or Russia is suffering: they were simply the type “U.S. companies can’t invest in Venezuela” rather than “nobody can do business with Venezuela”.
A single export country with a history of authoritarianism and coups fails to diversify, allows rampant top-level political and economic corruption, fails to initiate timely public-sector investment and stimulus, elects and maintains back-to-back dictatorships, fails to reign in rampant inflation, and is economically crashed by import sanctions from the world's most powerful nation...
...and they thought it would work?
You can't make socialism-capitalism cake* work in that situation. The government will always become increasingly desperate to ensure it maintains control, and strongman authoritarianism always results.
* Socialism-capitalism cake: Supporting your people with a basic welfare system to keep people from falling through and becoming resentful, and encouraging a top layer of diverse, mostly-free-market capitalism, kept reasonably fair through regulations, to encourage productivity and innovation.
Too much government involvement and you get soul-crushing authoritarianism and a stangant, inflexible society, regardless of political alignment. Too little government involvement and you get another Gilded Age with robber barons, zero-sum-game wealth and poverty, and society-destroying monopolies.
I wonder why authoritarianism and rampant top level political corruption is so prevalent in Venezuela? They got independence in 1811 so plenty of time to build a functional state before they got the resource curse.
Do you know?
maybe due to poor agriculture land it didn't attract top talent from Europe like the US did
I think Tomas Pueyo covered that in several articles about other Western Hemisphere countries. Entrenched non-entrepreneurial Spanish culture, and poor geography, doomed many Central and South American colonies from "getting their **** together" and establishing governments and economies which promoted fairness, innovation, and balanced social or business investment.
Or as my Dad says: "Most countries suck. Some suck for a while, some for a long while, and some just...yikes. Yeah, your cultural and economic playbook will never work."
That was among the most interesting and informative Substacks I've read. Thanks for doing all the research to produce it. Only one issue -- perhaps you know this but just didn't make it clear -- a valuable asset like oil (it was gold or sliver in the past) that a nation simply spends so as to enjoy a wealthy life style is the curse. That's because when the asset is gone, the nation has nothing left to keep the good times rolling. The wealth generated by gold or oil must be invested in durable, wealth-producing assets such as manufacturing or (today) technology, so the nation is not left with nothing when the oil is gone. This is what happened to Spain during the days when it was spending gold from South America, and obviously Venezuela, with complications, today.
The curse is not just when it goes. While it lasts, it destroys other industries and it creates cronyism and corruption. But yes, you feel the worst part when it goes away.
TP has also covered this in previous articles. The actual dutch disease 'curse' is more nuanced than that because the resource crowds out / destroys all other productive industry even prior to it being exhausted - so the curse itself prohibits the remedy.
You'd have to have a much more depraved society and government for that to happen -- seems to me. We see examples like Israel, with no natural resources at all (except some natural gas offshore) succeed spectacularly because they save and invest in technology and other wealth-producing assets. If there were to be a huge oil strike in Israel, you can bet they wouldn't abandon everything else they're doing to live off oil revenue -- and neither would any sane society. But I suppose there are a number if insane societies out there.
Excellent analysis, as usual. Great job of telling a story with pictures and graphs.
In my view, most of the problems Vzla is facing have their roots in their school system.
From their earliest age, it is hammered into them that their country is the richest in natural resources in the whole world. (I believe this to be true in my limited review, including ores for gold, aluminum, silver, &c.)
Thus, they believe the people should be rich & taken care of like they do in Kuwait.
Instead what they see is mass starvation and Cubans running everything from the army to the customs agency to the the DVM.
So, like an alcoholic, the cognitive dissonance kicks in: "I'm supposed to be rich, but I am dirt poor, I can't even find clean water to drink. But I live in the richest country in the world, so somebody must be keeping me down."
Enter Chavez with the easy bogeyman, the gringo yanqui.
If it wasn't Chavez, it would've been someone else.
You can blame Carlos Andres Perez and Caldera for this.
I know Miguel, but I also know that nothing of any significance has been built in Vzla since then!
He built the autopistas, the (one) rail line in the country, the Torres del Silencio, even the damn teleferico to the top of El Avila, the shopping malls, Maiquetia, everything.
My suegra et al thinks that this was the golden age of Vzla, and she has a point.
"Successful" dictators will predictably build massively to show their followers that they are "helping the People" with jobs and infrastructure (usually toward nationalistic, static, non-diverse goals).
"See? I'm doing things for you, and employing you! My lazy predecessors did not!"
Except that underneath the shiny new...whatever, that they created, terror and cruelty toward the weak and marginalized provide the grease for the gears.
Then, after the dictator is gone, the monuments to their supposedly "public" (often self-dealing) works, are often either neglected and forgotten, or actively destroyed.
So the people naiively look back on the years of terror, when their infrastructure worked, and most people lived a more comfortable (yet still scared witless) life, as "the golden years". Nevermind the secret police or lack of political and economic freedom.
People tend to easily forget pain, especially when it clashes with what they want to remember.
You conveniently ignore the constant US meddling, numerous coup attempts, etc. US Sanctions play a large role in the inability of Venezuelans to maintain their infrastructure. Remember when US sabotage cut power and destroyed an aluminium mill? Etc.
As always, my countryman Pueyo compromises the high quality of his articles when he addresses politics, where his evidence-based approach is replaced by his ideological views. Chávez emerged and reached power for very powerful reasons that Pueyo does not comment on. The social collapse of Venezuela had started way before his time. He had massive social support during his initial terms.
It also feels very naïf to associate Chavez and Maduro's Bolivarian regime to soviet style Communism. They have very little in common beyond the 'Socialist' label. Soviet systems rarely ever displayed the level of extractive corruption witnessed in Venezuela before and after Chavez. If only because Soviet elites had nowhere to hide the money.
I by no means endorse the Venezuelan regime that Pueyo characterises perfectly in their corruption and mismanagement. But way before them, the country was already hell for the most modest people.
Communism is taking from the productive to distribute broadly, in a coercive way because otherwise it can't be done. This is exactly what happened in Venezuela. The difference between it and Russia / China is that one has oil and the USSR early on didn't, while China has never had a lot.
What are the significant differences between Communist Russia/China and Venezuela? I'm curious on your take.
As I mentioned, massive support is not a sign of good long-term management.
But you're right that I'm not commenting on the social management of Venezuela before Chavez.
First of all, let me point out that no soviet countries were actually 'Communist'. They were Socialists. None of these countries ever reached the target state of Communism. The parties were called Communist. But that was not the form of the states.
Regarding Venezuela, it's a country whose Constitution establishes private property and free markets. So the basis of the economic system is essentially different from that of a Socialist economy.
As you mentioned, Chavez had to nationalize some companies, because they were not a property of the state. And then had to compensate the rightful owners. Does that sound like a Soviet country to you?
When you strip away the labels and ideologies, most countries trend toward enriching the wealthy at the expense of the poor.
As the wealthier get wealthier, regardless of economic structure or politics, they enact policies which generate more income at the expense of everyone else, all while using either lies (politics, ideology, cultural bias, and propaganda) or force (police, secret police, or military) to keep themselves in power.
Or sometimes, both.
Nations can offset that for a while (decades, usually) with laws, regulations, semi-free markets, education, economic prosperity, downward redistribution, elections, taxes, and other methods to keep upward wealth flow from rising too quickly.
But in the end, humans who 'have' (money, power) will always (either slowly or quickly, by law or gun) rig the game to take more from those who 'have not' (again: money, power).
"Me big stick means me get more meat. Gimme, or be hit on head."
Revolution, coups, war, and social movements can temporarily reset that, but usually result in the incoming government being even worse than the one before it.
Hm most of what’s called the west, which is the most capitalist we can find, has a much better income and quality of life for the lowest income ppl (that’s why all the poor from everywhere want to come). So the mindset of growing at the expense of the poor is manifestly wrong. Capitalism makes everybody better off, even though it rewards the most productive more.
I disgaree. Capitalism rewards those who come into money the most (chance, family, greed), and decides that those who do not come into money, regardless of how much or how long they work (if they can), have less of a right to share and enjoy the benefits of what that money entails and offers.
"Oh, you weren't born into the right education opportunity, wealth bracket, or ethnic/gender group? Or you didn't meet the right people at the right time? Or you suffer a physical disability or malady? Yeah, we won't help you share in the benefits of our society. You don't deserve it."
It's the economic system of showing contempt for any weakness. Support is only given if it is profitable for those at the top, and is taken if it doesn't maximize the income of the wealthy.
Also, just because someone isn't living on $2 per day, doesn't mean that they're doing well enough not to fear or stress for their well-being. Making $30K/year takes you much further in Goa, India, than $30/year does in Seattle, USA.
Plus, you mention "productive". But "productive" in terms of...what? Working 60 hours per week on your feet as a nurse, helping the sick? Or sitting behind a laptop for 20 hours a week as a CEO?
The nurse is more "productive" in terms of real physical labor, but dies definitely poorer than the average CEO, who is paid 300 times more to simply talk to other high-paid people all day.
Capitalism has always rewarded greed, and punished compassion. Just because it's the current leading economic system (seen as "the least bad"), doesn't make it good. Capitalism is based on the idea that "Only those who work and generate maximum profit have value as human beings. All others (ultimately) deserve to suffer or die for not being the smartest, cleverest, craftiest, or luckiest."
And the definition of "work" usually means, "earns the most capital", regardless of the actual physical effort expended.
In America, the richest country on earth and the epitome of a pure capitalist society, mid to low-income people have far worse healthcare than in any of the next hundred countries per GDP. And a lower life expectancy. The inequality of this type of capitalism only makes the rich better off, as Mike pointed out.
There are some capitalist systems that work socially better, like in northern Europe. But these are strongly regulated states where the most affluent individuals and businesses are heavily taxed. These are highly redistributive states, that is, they are applying some core socialist policies. I think we should acknowledge that capitalism is not such a blessing and socialism is not a curse. And what's best: they can work well together.
He added that comment below the chart after I made my comment from reading the article in my email (which lacked the chart images due to bandwidth issues at the time of reading, so I couldn't even see the "US sanctions" label in the chart then).
You’re missing out on crucial details with the earlier Puntofijo oil regime and the “sham” nationalization of the 1970s (Perez’s words not mine) and the Apertura Petrolero policies among other deregulation issues in the 1990s that devastated the economy even after U.S. companies made Venezuelans dependent on U.S. imports. No fan of how things went with Chavez but he at least tried (and failed) to diversify the economy, but there was a lot more structural issues that early administration faced at that point both internally with the landed elites and oil management (who sabotaged oil during the 2002 coup) and then successive pressure campaigns by a couple of US oil companies who didn’t want to pay more than 1% royalties for extracting oil, as well as massive sanctions by the most powerful country in the world by 2017. It’s no wonder corruption took hold. Just a few friendly points you might take into account for a part II. I also went to do research on this front and have my own article maybe you could check out.
Thanks. You’re probably right that there’s more to it, but this fits such a standard process that I question whether those precedents would have changed anything. But maybe. Where’s a good, succinct source on that?
What’s surprising to me is that Arab countries succeeded in keeping 80% of the value.
Regarding the oil reserves, it is unlikely that the guyana super basin just stops at the Venezuelan maritime borders. There is no data on the Venezuelan side of the basin because Chavez stopped the exploration by foreign contractors. In an alternate history, Venezuela would have been producing 1-2 additional millions barrels per day at the oil price peak in the 2000s.
Those geography based explanations are so helpful. I have a take that traveling to a place, even just for regular tourism, is an underrated way of understanding the country and its issues, and I wonder if that’s primarily because it makes the geography real. Maps like the ones you always show us are the next best thing.
Just a point that should be important to mention. Things started to go wrong in Venezuela in 1983, when the full economy collapsed during the Venezuelan Black Friday. After that came all the austerity measures and the collapse of the banking system in the 90s. When Chávez took over, in 1998, Venezuela was already in a pretty bad situation; then the Chavismo made it even worse (which seemed impossible at the time).
PS: You do mention it in the article, but I think it might be relevant from the start (and then clarify later).
Thank you!
Yes this is not meant to be a full history of the country, because the resource curse is so obvious that I don’t think we need to go too far. But you’re right that there’s a longer story to all of this. It just that it’s interesting, but it isn’t necessary to understand today.
the Latin American Debt Crisis hit many States hard, like Mexiko and so on...beside this, the same phenomenon /Volcker hits the east european bloc economies hard and there the regimes collapsed at the end of the 80s
but how did the us sanctions applied to venezuela with impediment to its oil exports affect the economic disaster?
I was completely unaware of the specifics when I started writing this, so I didn’t have a position. When you look into what was sanctioned and when, it’s clear the sanctions are not why Venezuela is poor.
Most of the sanctions have been on specific government officials. The first economic sanctions think was in 2016 or 2017. You can see that by then the country was in bad shit. Those sanctions were also not the type of sanctions Iran or Russia is suffering: they were simply the type “U.S. companies can’t invest in Venezuela” rather than “nobody can do business with Venezuela”.
So no, it’s not the sanctions.
A single export country with a history of authoritarianism and coups fails to diversify, allows rampant top-level political and economic corruption, fails to initiate timely public-sector investment and stimulus, elects and maintains back-to-back dictatorships, fails to reign in rampant inflation, and is economically crashed by import sanctions from the world's most powerful nation...
...and they thought it would work?
You can't make socialism-capitalism cake* work in that situation. The government will always become increasingly desperate to ensure it maintains control, and strongman authoritarianism always results.
* Socialism-capitalism cake: Supporting your people with a basic welfare system to keep people from falling through and becoming resentful, and encouraging a top layer of diverse, mostly-free-market capitalism, kept reasonably fair through regulations, to encourage productivity and innovation.
Too much government involvement and you get soul-crushing authoritarianism and a stangant, inflexible society, regardless of political alignment. Too little government involvement and you get another Gilded Age with robber barons, zero-sum-game wealth and poverty, and society-destroying monopolies.
I wonder why authoritarianism and rampant top level political corruption is so prevalent in Venezuela? They got independence in 1811 so plenty of time to build a functional state before they got the resource curse.
Do you know?
maybe due to poor agriculture land it didn't attract top talent from Europe like the US did
Populism wasn't born with Chavez. Remember the oil nationalization in the 1970s.
Most countries do fall to the resource curse, but not all. Botswana and Norway have survived it.
But yeah, this isn't a complete answer
I think Tomas Pueyo covered that in several articles about other Western Hemisphere countries. Entrenched non-entrepreneurial Spanish culture, and poor geography, doomed many Central and South American colonies from "getting their **** together" and establishing governments and economies which promoted fairness, innovation, and balanced social or business investment.
Or as my Dad says: "Most countries suck. Some suck for a while, some for a long while, and some just...yikes. Yeah, your cultural and economic playbook will never work."
Yeah, the Argentinian series covers this well
In 2004 Hugo Chavez packed the Venezuelan Supreme Court with his cronies, it has been credibly argued that was the point of no return.
Knowing him, the point of no return was when he survived the coup
That was among the most interesting and informative Substacks I've read. Thanks for doing all the research to produce it. Only one issue -- perhaps you know this but just didn't make it clear -- a valuable asset like oil (it was gold or sliver in the past) that a nation simply spends so as to enjoy a wealthy life style is the curse. That's because when the asset is gone, the nation has nothing left to keep the good times rolling. The wealth generated by gold or oil must be invested in durable, wealth-producing assets such as manufacturing or (today) technology, so the nation is not left with nothing when the oil is gone. This is what happened to Spain during the days when it was spending gold from South America, and obviously Venezuela, with complications, today.
The curse is not just when it goes. While it lasts, it destroys other industries and it creates cronyism and corruption. But yes, you feel the worst part when it goes away.
Note that Spain spent American silver!
"(I'm) scared that if I stop (drinking) all at once, the cumulative hangover will literally kill me."
-- Sterling Archer, 2x13 - "Double Trouble"
TP has also covered this in previous articles. The actual dutch disease 'curse' is more nuanced than that because the resource crowds out / destroys all other productive industry even prior to it being exhausted - so the curse itself prohibits the remedy.
You'd have to have a much more depraved society and government for that to happen -- seems to me. We see examples like Israel, with no natural resources at all (except some natural gas offshore) succeed spectacularly because they save and invest in technology and other wealth-producing assets. If there were to be a huge oil strike in Israel, you can bet they wouldn't abandon everything else they're doing to live off oil revenue -- and neither would any sane society. But I suppose there are a number if insane societies out there.
Yes indeed. Norway is a good example.
As a Venezuelan who has worked as an economist in the oil industry, congrats on an excellent post.
Here is a related post from an economics PhD blogger(who you actually brought to my attention a while back!): https://open.substack.com/pub/noahpinion/p/how-maduro-and-chavez-wrecked-venezuelas
Excellent analysis, as usual. Great job of telling a story with pictures and graphs.
In my view, most of the problems Vzla is facing have their roots in their school system.
From their earliest age, it is hammered into them that their country is the richest in natural resources in the whole world. (I believe this to be true in my limited review, including ores for gold, aluminum, silver, &c.)
Thus, they believe the people should be rich & taken care of like they do in Kuwait.
Instead what they see is mass starvation and Cubans running everything from the army to the customs agency to the the DVM.
So, like an alcoholic, the cognitive dissonance kicks in: "I'm supposed to be rich, but I am dirt poor, I can't even find clean water to drink. But I live in the richest country in the world, so somebody must be keeping me down."
Enter Chavez with the easy bogeyman, the gringo yanqui.
If it wasn't Chavez, it would've been someone else.
You can blame Carlos Andres Perez and Caldera for this.
The symptoms are very obvious, but the diagnosis completely wrong.
And, IMHO, what Vzla needs today is another Marco Perez-Jimenez
Even if the economy was good around the time of Marco Pérez Jiménez, he was still the head of a military dictatorship. Do not forget that.
I know Miguel, but I also know that nothing of any significance has been built in Vzla since then!
He built the autopistas, the (one) rail line in the country, the Torres del Silencio, even the damn teleferico to the top of El Avila, the shopping malls, Maiquetia, everything.
My suegra et al thinks that this was the golden age of Vzla, and she has a point.
"Successful" dictators will predictably build massively to show their followers that they are "helping the People" with jobs and infrastructure (usually toward nationalistic, static, non-diverse goals).
"See? I'm doing things for you, and employing you! My lazy predecessors did not!"
Except that underneath the shiny new...whatever, that they created, terror and cruelty toward the weak and marginalized provide the grease for the gears.
Then, after the dictator is gone, the monuments to their supposedly "public" (often self-dealing) works, are often either neglected and forgotten, or actively destroyed.
So the people naiively look back on the years of terror, when their infrastructure worked, and most people lived a more comfortable (yet still scared witless) life, as "the golden years". Nevermind the secret police or lack of political and economic freedom.
People tend to easily forget pain, especially when it clashes with what they want to remember.
You conveniently ignore the constant US meddling, numerous coup attempts, etc. US Sanctions play a large role in the inability of Venezuelans to maintain their infrastructure. Remember when US sabotage cut power and destroyed an aluminium mill? Etc.
I just added a section on this, but will add much more in the next article!
I don't remember that though
As always, my countryman Pueyo compromises the high quality of his articles when he addresses politics, where his evidence-based approach is replaced by his ideological views. Chávez emerged and reached power for very powerful reasons that Pueyo does not comment on. The social collapse of Venezuela had started way before his time. He had massive social support during his initial terms.
It also feels very naïf to associate Chavez and Maduro's Bolivarian regime to soviet style Communism. They have very little in common beyond the 'Socialist' label. Soviet systems rarely ever displayed the level of extractive corruption witnessed in Venezuela before and after Chavez. If only because Soviet elites had nowhere to hide the money.
I by no means endorse the Venezuelan regime that Pueyo characterises perfectly in their corruption and mismanagement. But way before them, the country was already hell for the most modest people.
Thank you for your thoughts.
Communism is taking from the productive to distribute broadly, in a coercive way because otherwise it can't be done. This is exactly what happened in Venezuela. The difference between it and Russia / China is that one has oil and the USSR early on didn't, while China has never had a lot.
What are the significant differences between Communist Russia/China and Venezuela? I'm curious on your take.
As I mentioned, massive support is not a sign of good long-term management.
But you're right that I'm not commenting on the social management of Venezuela before Chavez.
First of all, let me point out that no soviet countries were actually 'Communist'. They were Socialists. None of these countries ever reached the target state of Communism. The parties were called Communist. But that was not the form of the states.
Regarding Venezuela, it's a country whose Constitution establishes private property and free markets. So the basis of the economic system is essentially different from that of a Socialist economy.
As you mentioned, Chavez had to nationalize some companies, because they were not a property of the state. And then had to compensate the rightful owners. Does that sound like a Soviet country to you?
When you strip away the labels and ideologies, most countries trend toward enriching the wealthy at the expense of the poor.
As the wealthier get wealthier, regardless of economic structure or politics, they enact policies which generate more income at the expense of everyone else, all while using either lies (politics, ideology, cultural bias, and propaganda) or force (police, secret police, or military) to keep themselves in power.
Or sometimes, both.
Nations can offset that for a while (decades, usually) with laws, regulations, semi-free markets, education, economic prosperity, downward redistribution, elections, taxes, and other methods to keep upward wealth flow from rising too quickly.
But in the end, humans who 'have' (money, power) will always (either slowly or quickly, by law or gun) rig the game to take more from those who 'have not' (again: money, power).
"Me big stick means me get more meat. Gimme, or be hit on head."
Revolution, coups, war, and social movements can temporarily reset that, but usually result in the incoming government being even worse than the one before it.
Hm most of what’s called the west, which is the most capitalist we can find, has a much better income and quality of life for the lowest income ppl (that’s why all the poor from everywhere want to come). So the mindset of growing at the expense of the poor is manifestly wrong. Capitalism makes everybody better off, even though it rewards the most productive more.
I disgaree. Capitalism rewards those who come into money the most (chance, family, greed), and decides that those who do not come into money, regardless of how much or how long they work (if they can), have less of a right to share and enjoy the benefits of what that money entails and offers.
"Oh, you weren't born into the right education opportunity, wealth bracket, or ethnic/gender group? Or you didn't meet the right people at the right time? Or you suffer a physical disability or malady? Yeah, we won't help you share in the benefits of our society. You don't deserve it."
It's the economic system of showing contempt for any weakness. Support is only given if it is profitable for those at the top, and is taken if it doesn't maximize the income of the wealthy.
Also, just because someone isn't living on $2 per day, doesn't mean that they're doing well enough not to fear or stress for their well-being. Making $30K/year takes you much further in Goa, India, than $30/year does in Seattle, USA.
https://www.numbeo.com/cost-of-living/in/Goa?displayCurrency=USD
https://www.numbeo.com/cost-of-living/in/Seattle?displayCurrency=USD
Plus, you mention "productive". But "productive" in terms of...what? Working 60 hours per week on your feet as a nurse, helping the sick? Or sitting behind a laptop for 20 hours a week as a CEO?
The nurse is more "productive" in terms of real physical labor, but dies definitely poorer than the average CEO, who is paid 300 times more to simply talk to other high-paid people all day.
Capitalism has always rewarded greed, and punished compassion. Just because it's the current leading economic system (seen as "the least bad"), doesn't make it good. Capitalism is based on the idea that "Only those who work and generate maximum profit have value as human beings. All others (ultimately) deserve to suffer or die for not being the smartest, cleverest, craftiest, or luckiest."
And the definition of "work" usually means, "earns the most capital", regardless of the actual physical effort expended.
In America, the richest country on earth and the epitome of a pure capitalist society, mid to low-income people have far worse healthcare than in any of the next hundred countries per GDP. And a lower life expectancy. The inequality of this type of capitalism only makes the rich better off, as Mike pointed out.
There are some capitalist systems that work socially better, like in northern Europe. But these are strongly regulated states where the most affluent individuals and businesses are heavily taxed. These are highly redistributive states, that is, they are applying some core socialist policies. I think we should acknowledge that capitalism is not such a blessing and socialism is not a curse. And what's best: they can work well together.
Wow, this is a really helpful look at Venezuela. Thanks!
Amazing how you manage to avoid mentioning US sanctions.
Addressed in a comment. But look at the last chart called "Venezuelan Crude Production".
I will incorporate into the body of the article, thanks.
No, he dealt with it above in a reply to a comment.
He added that comment below the chart after I made my comment from reading the article in my email (which lacked the chart images due to bandwidth issues at the time of reading, so I couldn't even see the "US sanctions" label in the chart then).
Plenty of other countries to trade with.
There might be sth wrong with the map that is supposed to show areas with Indigenous population.
Ah damn. Substack now has a problem where gifs don't paste well. Corrected, thanks
You’re missing out on crucial details with the earlier Puntofijo oil regime and the “sham” nationalization of the 1970s (Perez’s words not mine) and the Apertura Petrolero policies among other deregulation issues in the 1990s that devastated the economy even after U.S. companies made Venezuelans dependent on U.S. imports. No fan of how things went with Chavez but he at least tried (and failed) to diversify the economy, but there was a lot more structural issues that early administration faced at that point both internally with the landed elites and oil management (who sabotaged oil during the 2002 coup) and then successive pressure campaigns by a couple of US oil companies who didn’t want to pay more than 1% royalties for extracting oil, as well as massive sanctions by the most powerful country in the world by 2017. It’s no wonder corruption took hold. Just a few friendly points you might take into account for a part II. I also went to do research on this front and have my own article maybe you could check out.
Thanks. You’re probably right that there’s more to it, but this fits such a standard process that I question whether those precedents would have changed anything. But maybe. Where’s a good, succinct source on that?
What’s surprising to me is that Arab countries succeeded in keeping 80% of the value.
There's a lot of scholarly work on these things, most in Spanish though. Nothing I've seen that gives a concise overview of all. I'll shamelessly link my post where you can view a few sources there: https://www.technostatecraft.com/p/the-united-states-in-venezuela-ihow
Regarding the oil reserves, it is unlikely that the guyana super basin just stops at the Venezuelan maritime borders. There is no data on the Venezuelan side of the basin because Chavez stopped the exploration by foreign contractors. In an alternate history, Venezuela would have been producing 1-2 additional millions barrels per day at the oil price peak in the 2000s.
Indeed. And that's lighter oil!
Excellent post. Concise, backed by data, clearly communicated. Thank you
Those geography based explanations are so helpful. I have a take that traveling to a place, even just for regular tourism, is an underrated way of understanding the country and its issues, and I wonder if that’s primarily because it makes the geography real. Maps like the ones you always show us are the next best thing.
I agree!
Excellent article!