Venezuela is one of the world largest exporters of crude oil and
the largest in the Western Hemisphere.
Population about 26 million People and Venezuela is twice as
large as California
In 2008, the country was the eighth-largest net oil exporter in the
Current President Hugo Chavez- 10 years in Power.
Ranks 162 out of 179 countries ranked on Transparency
International's corruption index
1900s: Oil was discovered, but the country’s
leaders kept wealth for themselves.
Oil exportation began in early 1920s.
1960s: Oil production made a few wealthy; the
majority of the rest lived in poverty in cities or
shacks on the outskirts.
1980s: The price of oil dropped. People suffered
economically. The price of oil recovered in 1990s.
Venezuela joined Organization of Petroleum
Exporting Countries (OPEC) that tries to keep oil
Major export: Oil (PDVSA)
◦ 5th largest oil producer in the world
◦ 80% of export earning come from oil
◦ Accounts for 50% of the Gov. Revenue
◦ One-third of the country’s gross domestic product (GDP)
◦ U.S is the biggest trading partner
Major import: Raw materials
• This economic disease is caught
whenever a commodity brings a
sudden increase of income in one
sector of the economy, which is
not matched by increased income
in other sectors of the economy.
• Manufacture & agricultural
production began to decrease
dramatically Ignored serious social problems,
• The increased demand for including education, health,
imported goods and domestic infrastructure, agriculture, and domestic
services has caused a general industries, causing Venezuela to fall well
inflation of wages and prices. behind other industrialized countries.
Takeover of privately owned corporations, industries, and
resources by a government with or without compensation
◦ (1) Prevention of unfair exploitation and large-scale labor layoffs
◦ (2) fair distribution of income from national resources,
◦ (3) to keep means of generating wealth in public control.
Birth of PDSA in 1976
In 2006, Chavez announced a nationalization of oil fields
managed by foreign companies, which resulted in an increase
of the government’s shares in these projects from 40 percent to
Potentially burden PDVSA with investment costs.
Hurt agriculture, Manufacture and Other industries.
PDVSA (Petróleos de Venezuela, S.A.), Venezuela’s
state-owned petroleum company, oversees the
exploration, production, refinement, and export of oil as
well as the exploration and production of natural gas.
It is the world's third-largest oil company, behind Saudi
Aramco and ExxonMobil.
In 1980, PDVSA acquired CITGO, a U.S.-based refinery,
and it is now one of the world's largest refiners.
60% live under “extreme poverty”
Issue with Gov. Revenue
Chavez take more control of Gov.
Depended to heavily on oil as their main source of revenue.
Oil income was not invested wisely and industry was mired in
The country's wealth is unequally distributed among the
population. The unemployment rate has reached 8.6% in 2010
and almost 60% of the population lives below the poverty line.