For decades, the absence of sound governance crippled a nation and drove it towards failure. While countries with far fewer resources have managed to prosper, this nation, despite its immense wealth, has failed on nearly every level. The extent of the suffering was reflected in a dark joke that spread in the wake of Venezuela’s severe economic collapse and famine. The joke mocked the ruling regime, claiming, “Maduro’s diet has reduced the weight of Venezuelans by 11 kilograms each year, and the loss keeps increasing.”
The recent tragedy is only the latest chapter in a long history of decline that began in 1958, when the country abandoned the economic vision that had made it, by 1950, the world’s fourth-largest economy, largely due to its vast oil reserves, its main source of wealth. It is important to note that, in addition to oil, Venezuela also possesses substantial untapped mineral resources, as well as agricultural and tourism sectors that were once significant sources of income. For three decades, from the 1950s through the 1980s, Venezuelans experienced a high standard of living, largely sustained by unrestricted consumer spending. However, the state’s heavy dependence on oil as its sole source of revenue, combined with its failure to develop diversified industries or alternative economic strategies, resulted in the widespread subsidization of nearly everything.
This intense “curse of dependence on a single source of income” proved disastrous when oil prices collapsed in the 1980s. The majority of the population was left unable to meet basic daily needs, despite the country’s vast untapped natural wealth. The crisis was a direct result of the absence of professional economic governance capable of harnessing the country’s potential to improve living standards. Instead, the implementation of reckless and ideologically driven policies led to widespread failure, marked by systemic corruption and the appointment of unqualified individuals to positions of authority.
As conditions deteriorated, millions of people began leaving the country in search of better opportunities. The number of migrants, including a significant share who left illegally, is estimated at around seven million, which is a striking figure compared to Venezuela’s total population of approximately 28 million. Today, Venezuela holds the world’s largest oil reserves, estimated at 303 billion barrels. Besides oil, the country is rich in other natural resources, including gold, diamonds, iron, bauxite, nickel, phosphates, and lithium.
