Economy of Venezuela
Encyclopedia
The economy of Venezuela is largely based on the petroleum
sector and manufacturing
. Revenue from petroleum exports accounts for about 18% of the country's GDP
and roughly 95% of total exports. Venezuela
is the fifth largest member of OPEC
by oil production. From the 1950s to the early 1980s the Venezuelan economy experienced a steady growth that attracted many immigrants. During the collapse of oil prices in the 1980s
the economy contracted. With high oil prices and rising government expenditures, Venezuela's economy grew by 9% in 2007 but is expected to have shrunk by 2.9% in 2009 and further in 2010. Venezuela has one of the highest inflation rates in the world averaging 29.1% in 2010, according to the CIA world fact book. According to Central Bank of Venezuela, the government received from 1998 to 2008 around 325 billion USD through oil production and export, and according to the International Energy Agency
, to June 2010 has production of 2.2 million of barrels per day, 800,000 of which go to the United States of America.
In January, 2010, Venezuelan president Hugo Chavez
announced a fixed dual exchange rate system for the bolivar. The system offers a 2.6 bolivar per USD rate for imports of essential items such as food, medicine, and industrial machinery, and a 4.3 bolivar per USD rate for imports of other products, including cars and telephones. CADIVI
, the government body which administers currency exchange, will continue as the only administrator of the foreign currencies and executor of this devaluation. Currently Venezuela imports almost all of its clothing, cars, and electronic items, while importing roughly two-thirds of its food needs.
A 2010 International Monetary Fund
(IMF) study qualified as "delayed and weak" the economic recovery of Venezuela in comparison with other countries of the region that had emerged from the world economic crisis "comparatively well" and were now recovering to a "strong rhythm". According to figures from the Venezuelan Central Bank, the economy showed signs of improvement in the first quarter of 2011 when GDP rose between 3% and 4%.
strike in 1922, Venezuela's dictator, Juan Vicente Gómez
, allowed US oil companies to write Venezuela's petroleum law. But oil history was made in 1943 when Standard Oil of New Jersey accepted a new agreement in Venezuela based on the 50-50 principle, "a landmark event." Terms even more favorable to Venezuela were negotiated in 1945, after a coup brought to power a left-leaning government that included Juan Pablo Pérez Alfonzo
.
From the 1950s to the early 1980s the Venezuelan economy was the strongest in South America. The continuous growth during that period attracted many immigrants.
In 1958 a new government again included Pérez Alfonso, who devised a plan for the international oil cartel
that would become OPEC
. In 1973 Venezuela voted to nationalize its oil industry outright, effective 1 Jan. 1976, with Petróleos de Venezuela (PDVSA) taking over and presiding over a number of holding companies; in subsequent years, Venezuela built a vast refining and marketing system in the US and Europe.
During Pérez Jimenez'
dictatorship from 1952 to 1958, Venezuela enjoyed remarkably high GDP growth, so that in the late 1950s Venezuela's real GDP per capita almost reached West Germany's. However, from 1958/1959 onward, Romulo Betancourt
(president from 1959 to 1964) inherited an enormous internal and external debt caused by rampant public spending during the dictatorship. Nevertheless, he managed to balance Venezuela's public budget and initiate a unsuccessful agrarian reform
.
Because of the oil wealth, Venezuelan workers "enjoyed the highest wages in Latin America."
This situation was reversed when oil prices collapsed during the 1980s
. The economy contracted, and the number of people living in poverty rose from 36% in 1984 to 66% in 1995. The country suffered a severe banking crisis (Venezuelan banking crisis of 1994
).
As the economy contracted in the 1980s, inflation
levels (consumer price inflation) fell, remaining between 6 and 12% from 1982 to 1986. In the late 80s and early 90s inflation rose to around 30 - 40% annually, with a 1989 peak of 84%. The mid-1990s saw annual rates of 50-60% (1993 to 1997) with an exceptional peak in 1996 at 99.88%. Subsequently inflation has remained in a range of around 15% to 30%.
By 1998, the economic crisis had grown even worse. Per capita
GDP was at the same level as 1963, down a third from its 1978 peak; and the purchasing power of the average salary was a third of its 1978 level.
and took office in February 1999. His economic policies have been more socialistic
than those of his predecessors. In the first four years of the Chávez presidency, the economy grew at first (1999 - 2001), then contracted from 2001 - 2003 to GDP levels similar to 1997, at first because of low oil prices, then because of the turmoil caused by the 2002 coup attempt and the 2002-2003 business strike. Other factors in the decline were an exodus of capital from the country, and a sudden reluctance of foreign capitalists to invest there. Gross Domestic Product was 50.0 trillion bolivares in 1998. At the bottom of the recession, 2003, it was 42.4 trillion bolivares (in constant 1998 bolivares). However, with a calmer political situation in 2004, GDP rebounded 50.1 trillion bolivares, and has risen strongly since, to 66.1 trillion bolivares in 2007 (both in constant 1998 bolivares). Particularly important in the recovery was the defeat of the oppositionist management at PdVSA after the 2002-2003 lockout/strike, which gave the government, for the first time, actual control of the state oil company and allowed the pursuit of a unified economic policy.
In response to the low oil prices at the end of the 1990s, Chavez played a leading role within OPEC to reinvigorate that organisation and obtain members' adherence to lower production quota
s designed to drive up the oil price. Venezuelan oil minister Alí Rodríguez Araque's announcement in 1999 that his country would respect OPEC production quotas marked "a historic turnaround from the nation's traditional pro-US oil policy."
Rising petroleum prices in 2000 took some pressure off the budget and currency. However, with the president's economic cabinet attempting to reconcile a wide range of views, the country's economic reform program had largely stalled. Reforms that were undertaken included the reduction or abolition of education
, healthcare and nutrition
fee
s to millions of Venezuelans.
The government sought international assistance to finance reconstruction after massive flooding and landslides in December 1999 caused an estimated US$15 billion
to $20 billion in damage.
The hardest hit sectors in the worst recession years, 2002–2003, were construction
(-55.9%), petroleum (-26.5%), commerce
(-23.6%) and manufacturing
(-22.5%). The drop in the petroleum
sector was caused by adherence to the OPEC quota
established in 2002 and the virtual cessation of exports during the PdVSA-led Venezuelan general strike of 2002-2003. The non-petroleum sector of the economy contracted by 6.5% in 2002. The bolivar, which has been suffering from serious inflation and devaluation relative to international standards since the late 1980s, continued to weaken.
The inflation rate, as measured by consumer price index
, was 35.8% in 1998, falling to a low of 12.5% in 2001 and rising to 31.1% in 2003. Historically, the highest yearly inflation was 99.9% in 1996. On 23 January 2003, in an attempt to support the bolivar and bolster the government's declining level of international reserves, as well as to mitigate the adverse impact from the oil industry work stoppage on the financial system, the Ministry of Finance and the central bank
suspended foreign exchange trading. On 6 February, the government created CADIVI
, a currency control board charged with handling foreign exchange procedures. The board set the US dollar exchange rate at 1,596 bolivares to the dollar for purchases and 1,600 to the dollar for sales.
The Venezuelan economy shrank 5.8 percent in the first three months of 2010 compared to the same period last year and now has the highest inflation rate in Latin America—30.5 percent. President Hugo Chavez has expressed optimism that Venezuela will soon emerge from recession, despite the International Monetary Fund forecasts showing that Venezuela will be the only country in the region to remain in recession this year.
products, which remain the keystone of the Venezuelan economy. The International Energy Agency shows how Venezuela's oil production has fallen in the last years, producing only 2300000 barrels (365,670,778.5 l) daily, down from 3.5 million in 1998, but with the recent currency devaluation the oil incomes will double its value in local currency.
A range of other natural resources, including iron ore, coal
, bauxite
, gold
, nickel
, and diamond
s, are in various stages of development and production. In April 2000, Venezuela's President decreed a new mining
law
, and regulations were adopted to encourage greater private sector participation in mineral extraction.
Venezuela utilizes vast hydropower
resources to supply power to the nation's industries. The national electricity law is designed to provide a legal framework and to encourage competition and new investment in the sector. After a 2-year delay, the government is proceeding with plans to privatize the various state-owned electricity
systems under a different scheme than previously envisioned.
, aluminium
, transport equipment, textile
s, apparel, beverages, and foodstuffs. It produces cement
, tires, paper
, fertilizer
, and assembles cars both for domestic and export
market
s.
accounts for approximately 3% of GDP, 10% of the labor force, and at least a quarter of Venezuela's land area. Venezuela exports rice
, corn
, fish
, tropical fruit
, coffee
, beef
, and pork
. The country is not self-sufficient in most areas of agriculture
. Venezuela imports about two-thirds of its food needs. In 2002, U.S. firms exported $347 million worth of agricultural products, including wheat
, corn
, soybean
s, soybean meal
, cotton
, animal fat
s, vegetable oils, and other items to make Venezuela one of the top two U.S. markets in South America. The United States supplies more than one-third of Venezuela's food imports.
Since 1998 People's Republic of China-Venezuela relations have seen an increasing partnership between the government of the Venezuelan president Hugo Chávez
and the People's Republic of China
. Sino-Venezuelan trade was less than $500m per year before 1999, and reached $7.5bn in 2009, making China Venezuela's second-largest trade partner, and Venezuela China's biggest investment destination in Latin America. Various bilateral deals have seen China invest billions in Venezuela, and Venezuela increase exports of oil and other resources to China.
In November 2010, following the expropriation of U.S. bottle-maker Owens-Illinois, works spent a week protesting outside factories in Valera and Valencia.
has a modern subway system over 31.6 mi (51 km) long. Maracaibo
and Valencia (third city) has recently inaugurated a metro system. The Maracaibo (second city) metro system is still unfinished.
Rail transport in Venezuela has been practically non-existent since the 1950s (with only one line operating), but the IAFE
is currently working on several lines, hopefully connecting most of Venezuela via railway by 2020, which, if achieved, would lead to a significant improvement in the countries' transport infrastructure.
At the beginning of August 2008, Venezuelan president Hugo Chavez and his colleagues from Argentina and Brazil spoke about Latin American integration and Chavez threw an ambitious idea out: a train that would connect Venezuela's capital (Caracas) with Argentina's (Buenos Aires), and cities in between .
The Chavez government has launched a National Railway Development Plan designed to create 15 railway lines across the country, with 8500 miles (13,679.4 km) of track by 2030. The network is being built in cooperation with China Railways, which is also cooperating with Venezuela to create factories for tracks, railway cars and eventually locomotives.
The economy recovered and grew by 16.8% in 2004. This growth occurred across a wide range of sectors - the oil industry directly provides only a small percentage of employment in the country. International reserves grew to US$27 billion
(old data, probably circa 2004). Polling firm Datanalysis noted that real income in the poorest sectors of society grew by 33% in 2004.
From 2004 to the first half of 2006, non-petroleum
On the black market the bolívar fell 28% in 2007 to Bs. 4,750 per US$, and declined to around VEF 5.5 (Bs 5500) per US$ in early 2009.
On 7 March 2007 the government announced that the Venezuelan bolívar would be redenominated at a ratio of 1 to 1000 at the beginning of 2008 and renamed the bolívar fuerte ("strong bolivar"), to ease accounting and transactions. This was carried out on 1 January 2008, at which time the exchange rate was 2.15 bolívar fuerte per US$.
The ISO 4217
code for the bolívar fuerte is "VEF".
Government spending as a percentage of GDP in Venezuela in 2007 was 30%, smaller than other capitalist mixed-economies such as France (49%) and Sweden (52%) . According to official sources from the United Nations
, the percentage of people below the national poverty line has decreased during the presidency of Hugo Chávez
, from 48.1% in 2002 to 28% in 2008.
With the 2007 rise in oil prices and rising government expenditures, Venezuela's economy grew by 9% in 2007. Oil prices fell starting in July 2008 resulting in a major loss of income.
Hit by a global recession, the economy contracted by 2% in the second quarter of 2009, contracting a further 4.5% in the third quarter of 2009. Chavez's response has been that these standards mis-state economic fact and that the economy should be measured by socialistic standards.
For 17 November 2009 the Central Bank reported that private sector activity declined by 4.5% and that inflation was averaging 26.7%. Compounding such problems is a drought which the government says was caused by El Nino, resulting in rationing of water and electricity and a short supply of food.
The year 2010 promises a Venezuela still in recession as Gross Domestic Product has fallen by 5.8% in the first quarter of 2010. The Central Bank has stated that the recession is due largely "to restricted access to foreign currency for imports, lower internal demand and electricity rationing." The oil sector's performance is also particularly troubling, with oil GDP shrinking by 5%. More importantly the Central Bank hints at the root cause of the oil contraction: "the bank said it was due to falls in production, "operative problems", maintenance stoppages and the channeling of diesel to run thermal generators during a power crisis." While the public sector of the economy has fallen 2.8%, the private sector has dropped off an astounding 6%. Such economic figures confirm the fact that Venezuela will be the last South American nation to emerge from recession.
The more recent income distribution data available is for distribution per capita, not per household. The two are not strictly comparable because poor households tend to have more members than rich households; thus, the per household data tends to show less inequality than the per capita data. The table below shows the available per capita data for recent years from the World bank.
Poverty in Venezuela increased during the 1980s and 1990s but has decreased during the Chávez presidency, with the exception of the troubled years 2002 and 2003. The table below shows the percentage of people, and the percentage of households, whose income is below a poverty line which is equal to the price of a market basket of necessities such as food.
Note that as an income-based measure of poverty, this omits the effect of some other factors that may affect economic wellbeing, such as the availability of free health care and education.
Sources:
World Bank, 1997 World Development Indicators, p 52;
Weisbrot et al., Poverty Rates in Venezuela (CEPR, 2006);
Venezuela, Instituto Nacional de Estadística, Venezuela. Medición de la pobreza, según hogares y personas, 2000-07 (./pobreza/LIhogares.asp), accessed May 2009.
Note: The Instituto Nacional de Estadística gives these poverty data twice yearly. For brevity we have included only the end of year data. For example, in 2007, household poverty in the first six months was 27.5% (not shown), and in the last six months, 28.5% (shown). The 1989 datum is from the World Bank and, as far as we know, is a whole year average.
fossil fuel:
25.46%
nuclear:
0%
other:
0% (1998)
Electricity Production
110.7 kW·h (2007)
Electricity – consumption:
83.84 kW·h (2006)
Electricity – exports:
0.542 kWh (2006 est.)
Electricity – imports:
0 kWh (2007)
Agriculture – products:
maize
, sorghum
, sugar cane, rice
, banana
s, vegetable
s, coffee
; beef
, pork
, milk
, egg
s; fish
Currency:
1 bolívar fuerte (Bs. F.) = 100 centimos (Currency code: VEF)
Exchange rates:
bolívares fuertes (Bs. F) per US$1: 2,15 (January 2008)
bolívares (Bs) per US$1: 2150 (January 2006), 1440 (September 2002), 652,33 (January 2000), 605,71 (1999), 547,55 (1998), 488,63 (1997), 417,33 (1996), 176,84 (1995)
United Nations, UNdata Explorer.
Mark Weisbrot
and Luis Sandoval:
Mark Weisbrot
, Luis Sandoval, and David Rosnick, Poverty
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
sector and manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
. Revenue from petroleum exports accounts for about 18% of the country's GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
and roughly 95% of total exports. Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
is the fifth largest member of OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
by oil production. From the 1950s to the early 1980s the Venezuelan economy experienced a steady growth that attracted many immigrants. During the collapse of oil prices in the 1980s
1980s oil glut
The 1980s oil glut was a serious surplus of crude oil caused by falling demand following the 1970s Energy Crisis. The world price of oil, which had peaked in 1980 at over US$35 per barrel , fell in 1986 from $27 to below $10...
the economy contracted. With high oil prices and rising government expenditures, Venezuela's economy grew by 9% in 2007 but is expected to have shrunk by 2.9% in 2009 and further in 2010. Venezuela has one of the highest inflation rates in the world averaging 29.1% in 2010, according to the CIA world fact book. According to Central Bank of Venezuela, the government received from 1998 to 2008 around 325 billion USD through oil production and export, and according to the International Energy Agency
International Energy Agency
The International Energy Agency is a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development in 1974 in the wake of the 1973 oil crisis...
, to June 2010 has production of 2.2 million of barrels per day, 800,000 of which go to the United States of America.
In January, 2010, Venezuelan president Hugo Chavez
Hugo Chávez
Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...
announced a fixed dual exchange rate system for the bolivar. The system offers a 2.6 bolivar per USD rate for imports of essential items such as food, medicine, and industrial machinery, and a 4.3 bolivar per USD rate for imports of other products, including cars and telephones. CADIVI
CADIVI
CADIVI is the Venezuelan government body which administers currency exchange in Venezuela...
, the government body which administers currency exchange, will continue as the only administrator of the foreign currencies and executor of this devaluation. Currently Venezuela imports almost all of its clothing, cars, and electronic items, while importing roughly two-thirds of its food needs.
A 2010 International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(IMF) study qualified as "delayed and weak" the economic recovery of Venezuela in comparison with other countries of the region that had emerged from the world economic crisis "comparatively well" and were now recovering to a "strong rhythm". According to figures from the Venezuelan Central Bank, the economy showed signs of improvement in the first quarter of 2011 when GDP rose between 3% and 4%.
1922 - 1964
When oil was discovered at the MaracaiboMaracaibo
Maracaibo is a city and municipality located in northwestern Venezuela off the western coast of the Lake Maracaibo. It is the second-largest city in the country after the national capital Caracas and the capital of Zulia state...
strike in 1922, Venezuela's dictator, Juan Vicente Gómez
Juan Vicente Gómez
Juan Vicente Gómez Chacón was a military general and de facto ruler of Venezuela from 1908 until his death in 1935. He was president on three occasions during this time, and ruled as an unelected military strongman for the rest of the era.-Early years:Gómez was a barely literate cattle herder and...
, allowed US oil companies to write Venezuela's petroleum law. But oil history was made in 1943 when Standard Oil of New Jersey accepted a new agreement in Venezuela based on the 50-50 principle, "a landmark event." Terms even more favorable to Venezuela were negotiated in 1945, after a coup brought to power a left-leaning government that included Juan Pablo Pérez Alfonzo
Juan Pablo Pérez Alfonzo
Juan Pablo Pérez Alfonso , was a prominent Venezuelan diplomat, politician and lawyer primarily responsible for the inception and creation of OPEC.-Early career:...
.
From the 1950s to the early 1980s the Venezuelan economy was the strongest in South America. The continuous growth during that period attracted many immigrants.
In 1958 a new government again included Pérez Alfonso, who devised a plan for the international oil cartel
Cartel
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
that would become OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
. In 1973 Venezuela voted to nationalize its oil industry outright, effective 1 Jan. 1976, with Petróleos de Venezuela (PDVSA) taking over and presiding over a number of holding companies; in subsequent years, Venezuela built a vast refining and marketing system in the US and Europe.
During Pérez Jimenez'
Marcos Pérez Jiménez
Marcos Evangelista Pérez Jiménez was a soldier and Presidents of Venezuela from 1952 to 1958.-Career:Marcos Evangelista Pérez Jiménez was born in Michelena, Táchira State. His father, Juan Pérez Bustamante, was a farmer; his mother, Adela Jiménez, a schoolteacher...
dictatorship from 1952 to 1958, Venezuela enjoyed remarkably high GDP growth, so that in the late 1950s Venezuela's real GDP per capita almost reached West Germany's. However, from 1958/1959 onward, Romulo Betancourt
Rómulo Betancourt
Rómulo Ernesto Betancourt Bello , known as "The Father of Venezuelan Democracy", was President of Venezuela from 1945 to 1948 and again from 1959 to 1964, as well as leader of Accion Democratica, Venezuela's dominant political party in the 20th century...
(president from 1959 to 1964) inherited an enormous internal and external debt caused by rampant public spending during the dictatorship. Nevertheless, he managed to balance Venezuela's public budget and initiate a unsuccessful agrarian reform
Agrarian reform
Agrarian reform can refer either, narrowly, to government-initiated or government-backed redistribution of agricultural land or, broadly, to an overall redirection of the agrarian system of the country, which often includes land reform measures. Agrarian reform can include credit measures,...
.
1960s - 1990s
Buoyed by a strong oil sector in the 1960s and 1970s, Venezuela's governments were able to maintain social harmony by spending fairly large amounts on public programs including health care, education, transport, and food subsidies. "Great strides were made in literacy and welfare programs."Because of the oil wealth, Venezuelan workers "enjoyed the highest wages in Latin America."
This situation was reversed when oil prices collapsed during the 1980s
1980s oil glut
The 1980s oil glut was a serious surplus of crude oil caused by falling demand following the 1970s Energy Crisis. The world price of oil, which had peaked in 1980 at over US$35 per barrel , fell in 1986 from $27 to below $10...
. The economy contracted, and the number of people living in poverty rose from 36% in 1984 to 66% in 1995. The country suffered a severe banking crisis (Venezuelan banking crisis of 1994
Venezuelan banking crisis of 1994
The 1994 banking crisis occurred in Venezuela when a number of the banks of Venezuela had to be taken over by the government. The first to fail, in January 1994, was Banco Latino, the country's second-largest bank. Later, two banks accounting for 18% of total deposits also failed...
).
As the economy contracted in the 1980s, inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
levels (consumer price inflation) fell, remaining between 6 and 12% from 1982 to 1986. In the late 80s and early 90s inflation rose to around 30 - 40% annually, with a 1989 peak of 84%. The mid-1990s saw annual rates of 50-60% (1993 to 1997) with an exceptional peak in 1996 at 99.88%. Subsequently inflation has remained in a range of around 15% to 30%.
By 1998, the economic crisis had grown even worse. Per capita
Per capita
Per capita is a Latin prepositional phrase: per and capita . The phrase thus means "by heads" or "for each head", i.e. per individual or per person...
GDP was at the same level as 1963, down a third from its 1978 peak; and the purchasing power of the average salary was a third of its 1978 level.
1999 - present
Hugo Chávez was elected president in December 1998Venezuelan presidential election, 1998
In the Venezuelan presidential election of 1998, Hugo Chávez was elected to his first term as President of Venezuela with the largest percentage of the popular vote in four decades...
and took office in February 1999. His economic policies have been more socialistic
Socialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
than those of his predecessors. In the first four years of the Chávez presidency, the economy grew at first (1999 - 2001), then contracted from 2001 - 2003 to GDP levels similar to 1997, at first because of low oil prices, then because of the turmoil caused by the 2002 coup attempt and the 2002-2003 business strike. Other factors in the decline were an exodus of capital from the country, and a sudden reluctance of foreign capitalists to invest there. Gross Domestic Product was 50.0 trillion bolivares in 1998. At the bottom of the recession, 2003, it was 42.4 trillion bolivares (in constant 1998 bolivares). However, with a calmer political situation in 2004, GDP rebounded 50.1 trillion bolivares, and has risen strongly since, to 66.1 trillion bolivares in 2007 (both in constant 1998 bolivares). Particularly important in the recovery was the defeat of the oppositionist management at PdVSA after the 2002-2003 lockout/strike, which gave the government, for the first time, actual control of the state oil company and allowed the pursuit of a unified economic policy.
In response to the low oil prices at the end of the 1990s, Chavez played a leading role within OPEC to reinvigorate that organisation and obtain members' adherence to lower production quota
Production quota
A production quota is a goal for the production of a good. It is typically set by a government or an organization, and can be applied to an individual worker, firm, industry or country. Quotas can be set high to encourage production, or can be used to limit production to control the supply of goods...
s designed to drive up the oil price. Venezuelan oil minister Alí Rodríguez Araque's announcement in 1999 that his country would respect OPEC production quotas marked "a historic turnaround from the nation's traditional pro-US oil policy."
Rising petroleum prices in 2000 took some pressure off the budget and currency. However, with the president's economic cabinet attempting to reconcile a wide range of views, the country's economic reform program had largely stalled. Reforms that were undertaken included the reduction or abolition of education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...
, healthcare and nutrition
Nutrition
Nutrition is the provision, to cells and organisms, of the materials necessary to support life. Many common health problems can be prevented or alleviated with a healthy diet....
fee
Fee
A fee is the price one pays as remuneration for services. Fees usually allow for overhead, wages, costs, and markup.Traditionally, professionals in Great Britain received a fee in contradistinction to a payment, salary, or wage, and would often use guineas rather than pounds as units of account...
s to millions of Venezuelans.
The government sought international assistance to finance reconstruction after massive flooding and landslides in December 1999 caused an estimated US$15 billion
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
to $20 billion in damage.
The hardest hit sectors in the worst recession years, 2002–2003, were construction
Construction
In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking...
(-55.9%), petroleum (-26.5%), commerce
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
(-23.6%) and manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
(-22.5%). The drop in the petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
sector was caused by adherence to the OPEC quota
Quota share
A quota share is a specified number or percentage of the allotment as a whole , that is prescribed to each individual entity ....
established in 2002 and the virtual cessation of exports during the PdVSA-led Venezuelan general strike of 2002-2003. The non-petroleum sector of the economy contracted by 6.5% in 2002. The bolivar, which has been suffering from serious inflation and devaluation relative to international standards since the late 1980s, continued to weaken.
The inflation rate, as measured by consumer price index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
, was 35.8% in 1998, falling to a low of 12.5% in 2001 and rising to 31.1% in 2003. Historically, the highest yearly inflation was 99.9% in 1996. On 23 January 2003, in an attempt to support the bolivar and bolster the government's declining level of international reserves, as well as to mitigate the adverse impact from the oil industry work stoppage on the financial system, the Ministry of Finance and the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
suspended foreign exchange trading. On 6 February, the government created CADIVI
CADIVI
CADIVI is the Venezuelan government body which administers currency exchange in Venezuela...
, a currency control board charged with handling foreign exchange procedures. The board set the US dollar exchange rate at 1,596 bolivares to the dollar for purchases and 1,600 to the dollar for sales.
The Venezuelan economy shrank 5.8 percent in the first three months of 2010 compared to the same period last year and now has the highest inflation rate in Latin America—30.5 percent. President Hugo Chavez has expressed optimism that Venezuela will soon emerge from recession, despite the International Monetary Fund forecasts showing that Venezuela will be the only country in the region to remain in recession this year.
Petroleum and other resources
Venezuela is a major producer of petroleumPetroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
products, which remain the keystone of the Venezuelan economy. The International Energy Agency shows how Venezuela's oil production has fallen in the last years, producing only 2300000 barrels (365,670,778.5 l) daily, down from 3.5 million in 1998, but with the recent currency devaluation the oil incomes will double its value in local currency.
A range of other natural resources, including iron ore, coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
, bauxite
Bauxite
Bauxite is an aluminium ore and is the main source of aluminium. This form of rock consists mostly of the minerals gibbsite Al3, boehmite γ-AlO, and diaspore α-AlO, in a mixture with the two iron oxides goethite and hematite, the clay mineral kaolinite, and small amounts of anatase TiO2...
, gold
Gold
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...
, nickel
Nickel
Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel belongs to the transition metals and is hard and ductile...
, and diamond
Diamond
In mineralogy, diamond is an allotrope of carbon, where the carbon atoms are arranged in a variation of the face-centered cubic crystal structure called a diamond lattice. Diamond is less stable than graphite, but the conversion rate from diamond to graphite is negligible at ambient conditions...
s, are in various stages of development and production. In April 2000, Venezuela's President decreed a new mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
, and regulations were adopted to encourage greater private sector participation in mineral extraction.
Venezuela utilizes vast hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
resources to supply power to the nation's industries. The national electricity law is designed to provide a legal framework and to encourage competition and new investment in the sector. After a 2-year delay, the government is proceeding with plans to privatize the various state-owned electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
systems under a different scheme than previously envisioned.
Manufacturing
Manufacturing contributed 17% of GDP in 2006. The manufacturing sector continues to increase dramatically in spite of private under-investment. Venezuela manufactures and exports steelSteel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
, aluminium
Aluminium
Aluminium or aluminum is a silvery white member of the boron group of chemical elements. It has the symbol Al, and its atomic number is 13. It is not soluble in water under normal circumstances....
, transport equipment, textile
Textile
A textile or cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands...
s, apparel, beverages, and foodstuffs. It produces cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...
, tires, paper
Paper
Paper is a thin material mainly used for writing upon, printing upon, drawing or for packaging. It is produced by pressing together moist fibers, typically cellulose pulp derived from wood, rags or grasses, and drying them into flexible sheets....
, fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
, and assembles cars both for domestic and export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...
s.
Agriculture
Agriculture in VenezuelaAgriculture in Venezuela
Agriculture in Venezuela has a much smaller share of the economy than in any other Latin American country. From the discovery of oil in Venezuela in the early twentieth century to the 1940s, the importance of agriculture declined rapidly, and with the beginning of large-scale industrial development...
accounts for approximately 3% of GDP, 10% of the labor force, and at least a quarter of Venezuela's land area. Venezuela exports rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
, corn
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
, fish
Fish
Fish are a paraphyletic group of organisms that consist of all gill-bearing aquatic vertebrate animals that lack limbs with digits. Included in this definition are the living hagfish, lampreys, and cartilaginous and bony fish, as well as various extinct related groups...
, tropical fruit
Fruit
In broad terms, a fruit is a structure of a plant that contains its seeds.The term has different meanings dependent on context. In non-technical usage, such as food preparation, fruit normally means the fleshy seed-associated structures of certain plants that are sweet and edible in the raw state,...
, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, beef
Beef
Beef is the culinary name for meat from bovines, especially domestic cattle. Beef can be harvested from cows, bulls, heifers or steers. It is one of the principal meats used in the cuisine of the Middle East , Australia, Argentina, Brazil, Europe and the United States, and is also important in...
, and pork
Pork
Pork is the culinary name for meat from the domestic pig , which is eaten in many countries. It is one of the most commonly consumed meats worldwide, with evidence of pig husbandry dating back to 5000 BC....
. The country is not self-sufficient in most areas of agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
. Venezuela imports about two-thirds of its food needs. In 2002, U.S. firms exported $347 million worth of agricultural products, including wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
, corn
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
, soybean
Soybean
The soybean or soya bean is a species of legume native to East Asia, widely grown for its edible bean which has numerous uses...
s, soybean meal
Soybean meal
Soybean meal also known as Soyabean Oil Cake is a flour made by grinding the solid residue of soybean oil production. It is widely used as a filler and source of protein in animal diets, including pig, chicken, cattle, horse, sheep, and fish feed....
, cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
, animal fat
Animal fat
Animal fats are rendered tissue fats that can be obtained from a variety of animals.- Pet nutrition :In pet nutrition, the source of animal fat concerns food manufacturers. AAFCO states that animal fat is "obtained from the tissues of mammals and/or poultry in the commercial processes of rendering...
s, vegetable oils, and other items to make Venezuela one of the top two U.S. markets in South America. The United States supplies more than one-third of Venezuela's food imports.
Trade
Thanks to petroleum exports, Venezuela usually posts a trade surplus. In recent years, nontraditional (i.e., nonpetroleum) exports have been growing rapidly but still constitute only about a quarter of total exports. The United States is Venezuela's leading trade partner. During 2002, the United States exported $4.4 billion in goods to Venezuela, making it the 25th-largest market for the U.S. Including petroleum products, Venezuela exported $15.1 billion in goods to the U.S., making it its 14th-largest source of goods. Venezuela opposes the proposed Free Trade Agreement of the Americas.Since 1998 People's Republic of China-Venezuela relations have seen an increasing partnership between the government of the Venezuelan president Hugo Chávez
Hugo Chávez
Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...
and the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
. Sino-Venezuelan trade was less than $500m per year before 1999, and reached $7.5bn in 2009, making China Venezuela's second-largest trade partner, and Venezuela China's biggest investment destination in Latin America. Various bilateral deals have seen China invest billions in Venezuela, and Venezuela increase exports of oil and other resources to China.
Labor
Under Chávez, Venezuela has also instituted worker-run "co-management" initiatives in which workers' councils play a key role in the management of a plant or factory. In experimental co-managed enterprises, such as the state-owned Alcasa factory, workers develop budgets and elect both managers and departmental delegates who work together with company executives on technical issues related to production.In November 2010, following the expropriation of U.S. bottle-maker Owens-Illinois, works spent a week protesting outside factories in Valera and Valencia.
Infrastructure
Venezuela has an extensive road system. The capital CaracasCaracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...
has a modern subway system over 31.6 mi (51 km) long. Maracaibo
Maracaibo
Maracaibo is a city and municipality located in northwestern Venezuela off the western coast of the Lake Maracaibo. It is the second-largest city in the country after the national capital Caracas and the capital of Zulia state...
and Valencia (third city) has recently inaugurated a metro system. The Maracaibo (second city) metro system is still unfinished.
Rail transport in Venezuela has been practically non-existent since the 1950s (with only one line operating), but the IAFE
Instituto Autónomo de Ferrocarriles del Estado
The Instituto de Ferrocariles del Estado is a state-run organization of Venezuela that manages the railway systems of the country...
is currently working on several lines, hopefully connecting most of Venezuela via railway by 2020, which, if achieved, would lead to a significant improvement in the countries' transport infrastructure.
At the beginning of August 2008, Venezuelan president Hugo Chavez and his colleagues from Argentina and Brazil spoke about Latin American integration and Chavez threw an ambitious idea out: a train that would connect Venezuela's capital (Caracas) with Argentina's (Buenos Aires), and cities in between .
The Chavez government has launched a National Railway Development Plan designed to create 15 railway lines across the country, with 8500 miles (13,679.4 km) of track by 2030. The network is being built in cooperation with China Railways, which is also cooperating with Venezuela to create factories for tracks, railway cars and eventually locomotives.
Economy Data
The Macroeconomic Stabilization Fund (FIEM) decreased from US$2.59 billion in January 2003 to US$700 million in October, but central bank-held international reserves actually increased from US$11.31 billion in January to US$19.67 billion in October 2003.1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
(old data, probably circa 2004). Polling firm Datanalysis noted that real income in the poorest sectors of society grew by 33% in 2004.
From 2004 to the first half of 2006, non-petroleum
On the black market the bolívar fell 28% in 2007 to Bs. 4,750 per US$, and declined to around VEF 5.5 (Bs 5500) per US$ in early 2009.
On 7 March 2007 the government announced that the Venezuelan bolívar would be redenominated at a ratio of 1 to 1000 at the beginning of 2008 and renamed the bolívar fuerte ("strong bolivar"), to ease accounting and transactions. This was carried out on 1 January 2008, at which time the exchange rate was 2.15 bolívar fuerte per US$.
The ISO 4217
ISO 4217
ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...
code for the bolívar fuerte is "VEF".
Government spending as a percentage of GDP in Venezuela in 2007 was 30%, smaller than other capitalist mixed-economies such as France (49%) and Sweden (52%) . According to official sources from the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
, the percentage of people below the national poverty line has decreased during the presidency of Hugo Chávez
Hugo Chávez
Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...
, from 48.1% in 2002 to 28% in 2008.
With the 2007 rise in oil prices and rising government expenditures, Venezuela's economy grew by 9% in 2007. Oil prices fell starting in July 2008 resulting in a major loss of income.
Hit by a global recession, the economy contracted by 2% in the second quarter of 2009, contracting a further 4.5% in the third quarter of 2009. Chavez's response has been that these standards mis-state economic fact and that the economy should be measured by socialistic standards.
For 17 November 2009 the Central Bank reported that private sector activity declined by 4.5% and that inflation was averaging 26.7%. Compounding such problems is a drought which the government says was caused by El Nino, resulting in rationing of water and electricity and a short supply of food.
The year 2010 promises a Venezuela still in recession as Gross Domestic Product has fallen by 5.8% in the first quarter of 2010. The Central Bank has stated that the recession is due largely "to restricted access to foreign currency for imports, lower internal demand and electricity rationing." The oil sector's performance is also particularly troubling, with oil GDP shrinking by 5%. More importantly the Central Bank hints at the root cause of the oil contraction: "the bank said it was due to falls in production, "operative problems", maintenance stoppages and the channeling of diesel to run thermal generators during a power crisis." While the public sector of the economy has fallen 2.8%, the private sector has dropped off an astounding 6%. Such economic figures confirm the fact that Venezuela will be the last South American nation to emerge from recession.
Socioeconomic indicators
Like most Latin American countries, Venezuela has an unequal distribution of wealth. The rich tend to be very rich and the poor very poor. In 1970, the poorest fifth of the population had 3% of national income, while the wealthiest fifth had 54%. For comparison the UK 1973 figures were 6.3% and 38.8%, and the US in 1972, 4.5% and 42.8%.The more recent income distribution data available is for distribution per capita, not per household. The two are not strictly comparable because poor households tend to have more members than rich households; thus, the per household data tends to show less inequality than the per capita data. The table below shows the available per capita data for recent years from the World bank.
Personal Income Distribution | |||||||
|---|---|---|---|---|---|---|---|
| | Share of personal income (%) received by: | | |||||
Year | Poorest fifth | 2nd fifth | 3rd fifth | 4th fifth | Wealthiest fifth | Wealthiest 10% | GINI index |
1987 | 4.7 | 9.2 | 14.0 | 21.5 | 50.6 | 34.2 | |
1995 | 4.3 | 8.8 | 13.8 | 21.3 | 51.8 | 35.6 | 46.8 |
1996 | 3.7 | 8.4 | 13.6 | 21.2 | 53.1 | 37.0 | 48.8 |
2000 | 4.7 | 9.4 | 14.5 | 22.1 | 45.4 | 29.9 | 42 |
Note that personal (per capita) income distribution, given in this table, is not exactly comparable with household income distribution, given in the previous table, because poor households tend to have more members. Sources: 1987 data: 1991 World Development Report, Table 30, pp 262–3. 1995 data: 1998 World Development Report, Table 2.8, p 70. 1996 data: 2000/2001 World Development Report, Table 5, pp 282–3. 2000 data: 2006 World Development Indicators, Table 2.8. All of the above publications are by the World Bank. | |||||||
Poverty in Venezuela increased during the 1980s and 1990s but has decreased during the Chávez presidency, with the exception of the troubled years 2002 and 2003. The table below shows the percentage of people, and the percentage of households, whose income is below a poverty line which is equal to the price of a market basket of necessities such as food.
Note that as an income-based measure of poverty, this omits the effect of some other factors that may affect economic wellbeing, such as the availability of free health care and education.
Percentage of people and households with income below national poverty line | |||||||||||||||
| Year | 1989 | · · · | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |
| Households | – | · · · | 48.1 | 43.9 | 42.0 | 40.4 | 39.0 | 48.6 | 55.1 | 47.0 | 37.9 | 30.6 | 28.5 | ||
| People | 31.3 | · · · | 54.5 | 50.4 | 48.7 | 46.3 | 45.4 | 55.4 | 62.1 | 53.9 | 43.7 | 36.3 | 33.6 | ||
Sources:
World Bank, 1997 World Development Indicators, p 52;
Weisbrot et al., Poverty Rates in Venezuela (CEPR, 2006);
Venezuela, Instituto Nacional de Estadística, Venezuela. Medición de la pobreza, según hogares y personas, 2000-07 (./pobreza/LIhogares.asp), accessed May 2009.
Note: The Instituto Nacional de Estadística gives these poverty data twice yearly. For brevity we have included only the end of year data. For example, in 2007, household poverty in the first six months was 27.5% (not shown), and in the last six months, 28.5% (shown). The 1989 datum is from the World Bank and, as far as we know, is a whole year average.
| indicator | Historical averages (%)(2003–2007) |
|---|---|
| Real GDP growth | 7.6 |
| Real domestic demand growth | 14.4 |
| Inflation Inflation In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a... |
20.1 |
| Current-account balance (% of GDP) | 13.7 |
| FDI inflows (% of GDP) | 1.1 |
| Major exports | % of total | Major imports | % of total |
|---|---|---|---|
| Oil Oil An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils.... & gas Gas Gas is one of the three classical states of matter . Near absolute zero, a substance exists as a solid. As heat is added to this substance it melts into a liquid at its melting point , boils into a gas at its boiling point, and if heated high enough would enter a plasma state in which the electrons... |
90.4 | Raw materials&intermediate goods | 44.5 |
| Other | 9.6 | Consumer goods | 24.5 |
| Capital goods | 31.0 | ||
| Leading markets 2006 | % of total | Leading suppliers | % of total |
|---|---|---|---|
| United States | 53.5 | United States | 44.5 |
| Netherlands Antilles Netherlands Antilles The Netherlands Antilles , also referred to informally as the Dutch Antilles, was an autonomous Caribbean country within the Kingdom of the Netherlands, consisting of two groups of islands in the Lesser Antilles: Aruba, Bonaire and Curaçao , in Leeward Antilles just off the Venezuelan coast; and Sint... |
8.8 | Colombia Colombia Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the... |
9.6 |
| China | 3.7 | Brazil Brazil Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people... |
7.9 |
Miscellaneous data
Electricity – production by source:fossil fuel:
25.46%
nuclear:
0%
other:
0% (1998)
Electricity Production
110.7 kW·h (2007)
Electricity – consumption:
83.84 kW·h (2006)
Electricity – exports:
0.542 kWh (2006 est.)
Electricity – imports:
0 kWh (2007)
Agriculture – products:
maize
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
, sorghum
Sorghum
Sorghum is a genus of numerous species of grasses, one of which is raised for grain and many of which are used as fodder plants either cultivated or as part of pasture. The plants are cultivated in warmer climates worldwide. Species are native to tropical and subtropical regions of all continents...
, sugar cane, rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, vegetable
Vegetable
The noun vegetable usually means an edible plant or part of a plant other than a sweet fruit or seed. This typically means the leaf, stem, or root of a plant....
s, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
; beef
Beef
Beef is the culinary name for meat from bovines, especially domestic cattle. Beef can be harvested from cows, bulls, heifers or steers. It is one of the principal meats used in the cuisine of the Middle East , Australia, Argentina, Brazil, Europe and the United States, and is also important in...
, pork
Pork
Pork is the culinary name for meat from the domestic pig , which is eaten in many countries. It is one of the most commonly consumed meats worldwide, with evidence of pig husbandry dating back to 5000 BC....
, milk
Milk
Milk is a white liquid produced by the mammary glands of mammals. It is the primary source of nutrition for young mammals before they are able to digest other types of food. Early-lactation milk contains colostrum, which carries the mother's antibodies to the baby and can reduce the risk of many...
, egg
Egg (food)
Eggs are laid by females of many different species, including birds, reptiles, amphibians, and fish, and have probably been eaten by mankind for millennia. Bird and reptile eggs consist of a protective eggshell, albumen , and vitellus , contained within various thin membranes...
s; fish
Fish
Fish are a paraphyletic group of organisms that consist of all gill-bearing aquatic vertebrate animals that lack limbs with digits. Included in this definition are the living hagfish, lampreys, and cartilaginous and bony fish, as well as various extinct related groups...
Currency:
1 bolívar fuerte (Bs. F.) = 100 centimos (Currency code: VEF)
Exchange rates:
bolívares fuertes (Bs. F) per US$1: 2,15 (January 2008)
bolívares (Bs) per US$1: 2150 (January 2006), 1440 (September 2002), 652,33 (January 2000), 605,71 (1999), 547,55 (1998), 488,63 (1997), 417,33 (1996), 176,84 (1995)
See also
- Banco Central de Venezuela
- List of Venezuelan Companies
- List of Venezuelan Cooperatives
Sources
Government of Venezuela, Instituto Nacional de Estadística (National Institute of Statistics.) Wide range of statistics. Adding pobreza/menupobreza.asp to the URL gives a menu of poverty statistics.United Nations, UNdata Explorer.
Mark Weisbrot
Mark Weisbrot
Mark Weisbrot is an American economist, columnist and co-director, with Dean Baker, of the Center for Economic and Policy Research in Washington, D.C. As a commentator, he contributes to publications such as New York Times, the UK's The Guardian, and Brazil's largest newspaper, Folha de S...
and Luis Sandoval:
- The Venezuelan Economy in the Chávez Years, Center for Economic and Policy Research, 2007.
- Update: The Venezuelan Economy in the Chávez Years CEPR, 2008.
Mark Weisbrot
Mark Weisbrot
Mark Weisbrot is an American economist, columnist and co-director, with Dean Baker, of the Center for Economic and Policy Research in Washington, D.C. As a commentator, he contributes to publications such as New York Times, the UK's The Guardian, and Brazil's largest newspaper, Folha de S...
, Luis Sandoval, and David Rosnick, Poverty
External links
- Wilpert, Gregory. Venezeula's Alternative to Neo-Liberalism IslamOnline.net, retrieved on 19-03-2009.
- Venezuela Energy Profile from the Energy Information Administration
- Venezuela to Give Currency New Name and Numbers
- Banco Central de Venezuela
- Venezuela's Economy During the Chavez Years
- Venezuela Nationalizes Gas Plant and Steel Companies, Pledges Worker Control by James Suggett, 22 May 2009
- Update on the Venezuelan Economy - Center for Economic and Policy ResearchCenter for Economic and Policy ResearchThe Center for Economic and Policy Research is a progressive economic policy think-tank based in Washington, DC, founded in 1999. CEPR works on Social Security, the US housing bubble, developing country economies , and gaps in the social policy fabric of the US economy.According to its own...
report, September 2010