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Venezuela Overview

Rich in natural resources, with the largest oil reserves in Latin America and the Caribbean – and with some of the largest reserves in the world – Venezuela has immense potential.

Nicolás Maduro assumed the presidency of the country in April 2013 following the death of President Hugo Chávez.

In economic terms, Venezuela has benefited from historically high international oil prices over the past decade, which enabled increased government spending on ambitious initiatives. The government nationalized a number of private enterprises in the hydrocarbon, mining and metallurgy, cement, banking and telecommunications sectors.

Venezuela has achieved high rates of economic growth (5.6% in 2012). Nevertheless, GDP growth declined to just 1.6% in the first half of 2013 with respect to the same period of 2012. Short-term growth forecasts are modest.

Among the most important programs that oil revenues have helped fund are the large social programs called Misiones. Economic growth and the redistribution of resources associated with these Misiones have reduced moderate poverty significantly, from 50% in 1998 to 25% in 2012. Inequality has also declined, as evidenced by the Gini Index, which fell from 0.49 in 1998 to 0.39 in 2011, one of the lowest rates in the region.

However, Venezuela continues to face daunting challenges. Its economy is extremely vulnerable to fluctuations in international oil prices given that oil accounts for over 96% of the country’s exports and nearly half of its fiscal revenue. Despite high oil prices, Venezuela has experienced major fiscal deficits along with a sharp increase in public debt (27% of GDP in 2012).  In addition, international reserves have fallen, representing fewer than five months of imports.

Moreover, as a result of the strongly expansive monetary policy aligned with the country’s fiscal objectives, the annual inflation rate reached 42.6% in June 2013.

QUICK FACTS:

  • 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).

The government prepaid its debt with the World Bank in 2007. The Bank currently has no active lending portfolio in Venezuela.

ACTIVE PROJECTS

Currently, the World Bank participates only in grant-supported projects in partnership with other organizations.

PAST PROJECTS

Improving Neighborhoods

Caracas Slum-Upgrading Project (CAMEBA)
: This project improved the quality of life of at least 115,000 people, which represented 97.4% of the population in Petare Norte, La Vega and Vargas, and 9.6% of the population in Caracas neighborhoods. Specifically, the project improved access to water and sanitation services, facilitated access to electricity, contributed to the construction of community service centers, increased community involvement and facilitated access to land titles by informal dwellers.

Health

Endemic Disease Control Project (i)
: This project helped control malaria and other endemic illnesses, such as Chagas disease, dengue fever, yellow fever, leprosy and leishmaniasis. The project reduced the incidence and impact of endemic diseases and strengthened institutions responsible for their control. Currently, Venezuela is better prepared to apply modern technologies in the control and treatment of these illnesses given the improved training and the establishment of research, diagnostic and field support centers.

Urban Transport

Urban Transport Project (i)
: This project considerably strengthened the capacity of urban transportation agencies in 12 Venezuelan cities. More than 250 experts from the National Urban Transportation Fund (FONDUR), municipalities and the private sector received training in transport economics and planning, general and environmental management, engineering, procurement, transport supervision and monitoring and information systems. Between 1994 and 2001, more than 7,700 bus drivers attended courses to develop new skills and improve their knowledge of traffic laws and road safety.

Youth Observatories

With the Youth Observatory in La Trilla neighborhood, the Voces Nuevas 2007 project added to the 10 previous experiences with youth observatories funded by the World Bank in partnership with four other donors. These efforts helped promote the development of observation methods and techniques to give a voice to youth leaders in community organizations. The program provided participants with a life experience in which youth from diverse backgrounds had the opportunity to talk about their differences, perceived needs and views about their realities.

Voces Nuevas empowered these young people in relation to youth-related issues as well as in their key role in the development of their communities and country.

LENDING

Venezuela: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

Around The Bank Group

Find out what the Bank Group's branches are doing in Venezuela.