A country rich in natural resources, with the largest oil reserves in Latin America and the Caribbean – and among the world’s largest— Venezuela has immense potential.
Following the death of President Hugo Chávez and the calling of new elections, Nicolás Maduro became the new president of Venezuela in April 2013.
On the economic front, Venezuela has benefited from the historically high international oil prices of the past decade, which have enabled increased government spending on ambitious programs. Additionally, the government nationalized several private companies in sectors such as hydrocarbons, mining and metallurgy, cement, banking and telecommunications.
Venezuela has achieved high growth rates (5.6% in 2012). However, GDP growth slowed to 1.4% in 2013 – according to unofficial figures –and a significant decline is forecast, even resulting in negative growth in 2014 and 2015.
Among the most important programs that oil resources have helped to finance are the broad-based social programs called Misiones. Economic growth and the redistribution of resources associated with these missions have led to an important decline in moderate poverty, from 50% in 1998 to approximately 30% in 2012. Likewise, inequality has decreased, reducing the Gini Index from 0.49 in 1998 to 0.39 in 2012, which is among the lowest in the region.
Nevertheless, Venezuela’s development faces important challenges. Its economy is highly vulnerable to fluctuations in international oil prices since oil accounts for over 96% of the country’s exports and generates nearly half of fiscal income. Despite high oil prices, Venezuela has experienced fiscal deficits accompanied by an increase in public debt (26% of GDP in 2012, for the central government). Likewise, international reserves have fallen, representing less than five months of imports.
In addition, a strongly expansive monetary policy aligned with fiscal objectives drove up inflation to 56.3% in Venezuela at the end of 2013, the highest rate on the continent.
- Name: Bolivarian Republic of Venezuela.
- Population: 29.9 million (estimated, 2012).
- Capital: Caracas.
- Other important cities: Maracaibo, Valencia, Maracay, Barquisimeto, Mérida, San Cristóbal and Barcelona-Puerto La Cruz.
- Area: 916,445 km².
- Currency: Bolívar.
- Per capita GDP: US$ 12.756 (2012)
- Exports: Oil.
- Language: Spanish.
- Religion: Catholic majority.
- Life expectancy: 74 years (2011).